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FAIR VALUE MEASUREMENTS | 3 Months Ended
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Mar. 31, 2022
Financial Instruments And Fair Value Measurements [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Bunge's various financial instruments include certain components of working capital such as trade accounts receivable and trade accounts payable. Additionally, Bunge uses short- and long-term debt to fund operating requirements. Trade accounts receivable, trade accounts payable, and short-term debt are stated at their carrying value, which is a reasonable estimate of fair value. See Note 4 - Trade Structured Finance Program for trade structured finance program, Note 8- Other Non-Current Assets for long-term receivables from farmers in Brazil, net and other long-term investments, and Note 13- Debt for long-term debt. Bunge's financial instruments also include derivative instruments and marketable securities, which are stated at fair value. The fair value standard describes three levels within its hierarchy that may be used to measure fair value.
Level | Description | Financial Instrument (Assets / Liabilities)
Level 1 | Quoted prices (unadjusted) in active markets for identical assets or liabilities. | Exchange traded derivative contracts. Marketable securities in active markets.
Level 2 | Observable inputs, including adjusted Level 1 quotes, quoted prices for similar assets or liabilities, quoted prices in markets that are less active than traded exchanges and other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | Exchange traded derivative contracts (less liquid markets). Readily marketable inventories. Over-the-counter ("OTC") commodity purchase and sale contracts. OTC derivatives whose value is determined using pricing models with inputs that are generally based on exchange traded prices, adjusted for location specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data. Marketable securities in less active markets.
Level 3 | Unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities. | Assets and liabilities whose value is determined using proprietary pricing models, discounted cash flow methodologies or similar techniques. Assets and liabilities for which the determination of fair value requires significant management judgment or estimation.
In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy. The lowest level of input that is a significant component of the fair value measurement determines the placement of the entire fair value measurement in the hierarchy. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy levels. For a further definition of fair value and the associated fair value levels, refer to Note 15 - Fair Value Measurements, included in the Company's 2021 Annual Report on Form 10-K. The following table sets forth, by level, the Company’s assets and liabilities that were accounted for at fair value on a recurring basis.
|  | Fair Value Measurements at Reporting Date
|  | March 31, 2022 |  | December 31, 2021
(US$ in millions) |  | Level 1 | Level 2 | Level 3 | Total |  | Level 1 | Level 2 | Level 3 | Total
Assets: |  |  |  |  |  |  |  |  |  |
Readily marketable inventories (Note 6) |  | $ | — |  | $ | 7,744 |  | $ | 1,131 |  | $ | 8,875 |  |  | $ | — |  | $ | 6,664 |  | $ | 205 |  | $ | 6,869 |
Trade accounts receivable (1) |  | — |  | 3 |  | — |  | 3 |  |  | — |  | 1 |  | — |  | 1 |
Unrealized gain on derivative contracts (2): |  |  |  |  |  |  |  |  |  |
Interest rate |  | — |  | 9 |  | — |  | 9 |  |  | — |  | 49 |  | — |  | 49 |
Foreign exchange |  | 3 |  | 902 |  | — |  | 905 |  |  | — |  | 340 |  | — |  | 340 |
Commodities |  | 144 |  | 1,602 |  | 126 |  | 1,872 |  |  | 63 |  | 1,055 |  | 34 |  | 1,152 |
Freight |  | 105 |  | 7 |  | — |  | 112 |  |  | 79 |  | 5 |  | — |  | 84 |
Energy |  | 266 |  | 19 |  | — |  | 285 |  |  | 44 |  | 4 |  | — |  | 48 |
Credit |  | — |  | 4 |  | — |  | 4 |  |  | — |  | 6 |  | — |  | 6 |
Equity |  | — |  | — |  | — |  | — |  |  | 1 |  | — |  | — |  | 1 |
Other (3) |  | 92 |  | 87 |  | 70 |  | 249 |  |  | 91 |  | 406 |  | — |  | 497 |
Total assets |  | $ | 610 |  | $ | 10,377 |  | $ | 1,327 |  | $ | 12,314 |  |  | $ | 278 |  | $ | 8,530 |  | $ | 239 |  | $ | 9,047 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Trade accounts payable (1) |  | $ | — |  | $ | 544 |  | $ | 447 |  | $ | 991 |  |  | $ | — |  | $ | 545 |  | $ | 23 |  | $ | 568 |
Unrealized loss on derivative contracts (4): |  |  |  |  |  |  |  |  |  |
Interest rate |  | — |  | 157 |  | — |  | 157 |  |  | — |  | 47 |  | — |  | 47 |
Foreign exchange |  | — |  | 604 |  | — |  | 604 |  |  | — |  | 309 |  | — |  | 309 |
Commodities |  | 143 |  | 2,263 |  | 99 |  | 2,505 |  |  | 98 |  | 1,051 |  | 65 |  | 1,214 |
Freight |  | 201 |  | — |  | — |  | 201 |  |  | 162 |  | — |  | — |  | 162 |
Energy |  | 196 |  | — |  | — |  | 196 |  |  | 29 |  | 1 |  | — |  | 30 |
Credit |  | — |  | — |  | — |  | — |  |  | — |  | 1 |  | — |  | 1 |
Total liabilities |  | $ | 540 |  | $ | 3,568 |  | $ | 546 |  | $ | 4,654 |  |  | $ | 289 |  | $ | 1,954 |  | $ | 88 |  | $ | 2,331 |
(1) These receivables and payables are hybrid financial instruments for which Bunge has elected the fair value option as they are derived from purchases and sales of agricultural commodity products in the normal course of business. (2) Unrealized gains on derivative contracts are generally included in Other current assets. There were $32 million and $49 million included in Other non-current assets at March 31, 2022 and December 31, 2021, respectively. There were $1 million and $2 million included in Assets held for sale at March 31, 2022 and December 31, 2021, respectively. (3) Other includes the fair values of marketable securities and investments in Other current assets and Other non-current assets. (4) Unrealized losses on derivative contracts are generally included in Other current liabilities. There were $158 million and $49 million included in Other non-current liabilities at March 31, 2022 and December 31, 2021, respectively. There were zero and $1 million included in Liabilities held for sale at March 31, 2022 and December 31, 2021, respectively. Readily marketable inventories—RMI reported at fair value are valued based on commodity futures exchange quotations, broker or dealer quotations, or market transactions in either listed or OTC markets with appropriate adjustments for differences in local markets where the Company's inventories are located. In such cases, the inventory is classified within Level 2. Certain inventories may utilize significant unobservable data related to local market adjustments to determine fair value. In such cases, the inventory is classified as Level 3. If the Company used different methods or factors to determine fair values, amounts reported as unrealized gains and losses on derivative contracts and RMI at fair value in the condensed consolidated balance sheets and condensed consolidated statements of income could differ. Additionally, if market conditions change subsequent to the reporting date, amounts reported in future periods as unrealized gains and losses on derivative contracts and RMI at fair value in the condensed consolidated balance sheets and condensed consolidated statements of income could differ. Derivatives—The majority of exchange traded futures and options contracts and exchange cleared contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1. The majority of the Company’s exchange traded agricultural commodity futures are cash-settled on a daily basis and, therefore, are not included in these tables. The Company's forward commodity purchase and sales contracts are classified as derivatives along with other OTC derivative instruments, primarily relating to freight, energy, foreign exchange and interest rates, and are classified within Level 2 or Level 3 as described below. The Company estimates fair values based on exchange quoted prices, adjusted as appropriate for differences in local markets. These differences are generally valued using inputs from broker or dealer quotations, or market transactions in either the listed or OTC markets. In such cases, these derivative contracts are classified within Level 2. OTC derivative contracts include swaps, options, and structured transactions that are generally fair valued using quantitative models that require the use of multiple market inputs including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets which are not highly active, other observable inputs relevant to the asset or liability, and market inputs corroborated by correlation or other means. These valuation models include inputs such as interest rates, prices, and indices to generate continuous yield or pricing curves and volatility factors. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain OTC derivatives trade in less active markets with less availability of pricing information and certain structured transactions can require internally developed model inputs that might not be observable in or corroborated by the market. Marketable securities and investments comprise government treasury securities, corporate debt securities and other investments. Bunge analyzes how the prices are derived and determines whether the prices are liquid or less liquid tradable prices. Marketable securities and investments with liquid prices are valued using prices from publicly available sources and classified as Level 1. Marketable securities and investments with less-liquid prices are valued using third-party quotes or pricing models and classified as Level 2 or Level 3 as described below. Level 3 Measurements The following relates to Level 3 measurements. An instrument may transfer into or out of Level 3 due to inputs becoming either observable or unobservable. Level 3 Measurements—Transfers in and/or out of Level 3 represent existing assets or liabilities that were either previously categorized as a higher level for which the inputs to the model became unobservable or assets and liabilities that were previously classified as Level 3 for which the lowest significant input became observable during the period. Bunge's policy regarding the timing of transfers between levels is to record the transfers at the beginning of the reporting period. Level 3 Readily marketable inventories and trade accounts payable—The significant unobservable inputs resulting in Level 3 classification for RMI, physically settled forward purchase and sales contracts, and trade accounts payable, relate to certain management estimations regarding costs of transportation and other local market or location-related adjustments, primarily freight related adjustments in the interior of Brazil and the lack of market corroborated information in Canada. In both situations, the Company uses proprietary information such as purchase and sale contracts and contracted prices to value freight, premiums and discounts in its contracts. Movements in the prices of these unobservable inputs alone would not have a material effect on the Company's financial statements as these contracts do not typically exceed one future crop cycle. Level 3 Derivatives—Level 3 derivative instruments utilize both market observable and unobservable inputs within the fair value measurements. These inputs include commodity prices, price volatility, interest rates, volumes, and locations. Level 3 Others—primarily relates to marketable securities and investments valued using third-party quotes or pricing models with inputs based on similar securities adjusted to reflect management’s best estimate of the specific characteristics of the securities held by the Company. Such inputs represent a significant component of the fair value of the securities held by the Company, resulting in the securities being classified as Level 3. The tables below present reconciliations for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2022 and 2021. These instruments were valued using pricing models that management believes reflect the assumptions that would be used by a marketplace participant.
| Three Months Ended March 31, 2022
(US$ in millions) | Readily Marketable Inventories | Derivatives, Net | Trade Accounts Payable | Other(2) | Total
Balance, January 1, 2022 | $ | 205 |  | $ | (31) |  | $ | (23) |  | $ | — |  | $ | 151 |
Total gains and losses (realized/unrealized) included in cost of goods sold (1) | 135 |  | 36 |  | 15 |  | — |  | 186 |
Total gains and losses (realized/unrealized) included in Other income (expense) – net | — |  | — |  | — |  | (64) |  | (64) |
Purchases | 1,246 |  | — |  | (366) |  | — |  | 880 |
Sales | (1,377) |  | — |  | — |  | — |  | (1,377) |
Issuances | — |  | — |  | — |  | — |  | — |
Settlements | — |  | — |  | 273 |  | (84) |  | 189 |
Transfers into Level 3 | 964 |  | 22 |  | (345) |  | 218 |  | 859 |
Transfers out of Level 3 | (47) |  | 1 |  | — |  | — |  | (46) |
Translation adjustment | 5 |  | (1) |  | (1) |  | — |  | 3 |
Balance, March 31, 2022 | $ | 1,131 |  | $ | 27 |  | $ | (447) |  | $ | 70 |  | $ | 781 |
(1) Readily marketable inventories, derivatives, net and trade accounts payable, include gains/(losses) of $83 million, $52 million and $15 million, respectively, that are attributable to the change in unrealized gains/(losses) relating to Level 3 assets and liabilities still held at March 31, 2022. (2) Comprises the fair values of marketable securities and investments in Other current assets. Included within Other income (expense) - net of the condensed consolidated statements of income are $32 million in gains/(losses) related to securities still held at March 31, 2022.
| Three Months Ended March 31, 2021
(US$ in millions) | Readily Marketable Inventories | Derivatives, Net | Trade Accounts Payable | Total
Balance, January 1, 2021 | $ | 208 |  | $ | (8) |  | $ | (9) |  | $ | 191 |
Total gains and losses (realized/unrealized) included in cost of goods sold (1) | 254 |  | (112) |  | 3 |  | 145 |
Purchases | 540 |  | 3 |  | (185) |  | 358 |
Sales | (762) |  | — |  | — |  | (762) |
Issuances | — |  | (2) |  | — |  | (2) |
Settlements | — |  | 34 |  | — |  | 34 |
Transfers into Level 3 | 446 |  | (25) |  | (159) |  | 262 |
Transfers out of Level 3 | (57) |  | 42 |  | 137 |  | 122 |
Translation adjustment | — |  | — |  | — |  | — |
Balance, March 31, 2021 | $ | 629 |  | $ | (68) |  | $ | (213) |  | $ | 348 |
(1) Readily marketable inventories, derivatives, net and trade accounts payable, includes gains/(losses) of $130 million, $(125) million and $3 million, respectively, that are attributable to the change in unrealized gains/(losses) relating to Level 3 assets and liabilities still held at March 31, 2021.

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- Definition Financial Instruments And Fair Value Measurements [Abstract] + References No definition available. + Details
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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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