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Off-Balance Sheet Arrangements | 6 Months Ended
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Jun. 30, 2019
Receivables [Abstract] |
Off-Balance Sheet Arrangements |
10. | Off–Balance Sheet Arrangements
WEX Europe Services Accounts Receivable Factoring During the first quarter of 2017, WEX Europe Services entered into a factoring arrangement with an unrelated third-party financial institution. Under this arrangement, customer accounts receivable balances are sold without recourse to the extent that they are maintained at or below the credit limit established by the buyer. If customer receivable balances exceed the buyer’s credit limit, the Company maintains the risk of default. The Company obtained a true-sale opinion from an independent attorney, which states that the factoring agreement provides legal isolation upon WEX Europe Services bankruptcy or receivership under local law and creates a sale of receivables for amounts transferred both below and above the established credit limits. Additionally, there are no indications of the Company’s continuing involvement in the factored receivables. As such, transfers under this arrangement are treated as sales and are accounted for as reductions in trade accounts receivable because effective control of the receivables is transferred to the buyer. The Company sold approximately $164.3 million and $314.2 million of accounts receivable under this arrangement during the three and six months ended June 30, 2019, respectively. For the three and six months ended June 30, 2018 the Company sold approximately $190.7 million and $360.9 million of accounts receivable, respectively. Proceeds received, which are recorded net of applicable costs, including interest and commissions, are recorded in operating activities in the statements of cash flows. The loss on factoring was $0.9 million and $1.8 million for the three and six months ended June 30, 2019, respectively, and $1.2 million and $2.3 million for the three and six months ended June 30, 2018, and was recorded within cost of services. As of June 30, 2019 and December 31, 2018, the amount of outstanding transferred receivables in excess of the established credit limit was $1.0 million and $0.2 million, respectively. Charge-backs on balances in excess of the credit limit during the six months ended June 30, 2019 and June 30, 2018 were insignificant. WEX Bank Accounts Receivable Factoring In August 2018, WEX Bank entered into a factoring agreement with an unrelated third-party financial institution to sell certain of our trade accounts receivable under non-recourse transactions. The Company obtained a true-sale opinion from an independent attorney, which states that the factoring agreement provides legal isolation upon WEX Bank bankruptcy or receivership under local law. WEX Bank continues to service the receivables post-transfer with no participating interest. As such, transfers under this arrangement are treated as a sale and are accounted for as a reduction in trade accounts receivable because effective control of the receivables is transferred to the buyer. The Company sold approximately $4.0 billion and $6.0 billion of receivables under this arrangement during the three and six months ended June 30, 2019, respectively. Proceeds received, which are reported net of a negotiated discount rate, are recorded in operating activities in the statement of cash flows. The loss on factoring was $1.1 million and $1.7 million for the three and six months ended June 30, 2019, respectively, and is recorded within cost of services. WEX Latin America Securitization of Receivables During the second quarter of 2017, WEX Latin America entered into a securitized debt agreement to transfer certain unsecured receivables associated with our salary payment card product to an investment fund managed by an unrelated third-party financial institution. WEX Latin America holds a non-controlling equity interest in the investment fund. During the six months ended June 30, 2019, the Company did not make equity contributions to the investment fund. As of December 31, 2017 and through June 30, 2018, this securitization arrangement did not meet the derecognition conditions due to continuing involvement with the transferred assets and accordingly WEX Latin America reported the transferred receivables and securitized debt on our balance sheet. During the three and six months ended June 30, 2018, the Company recognized approximately $2.3 million and $4.4 million of operating interest expense under this financing arrangement, respectively. During the third quarter of 2018, the securitization agreements were amended, resulting in the Company giving effective control of the transferred receivables to the buyer. The Company received a true-sale opinion from an independent attorney stating that the amended agreements provide legal isolation upon WEX Latin America bankruptcy or receivership under local law. As such, transfers under this arrangement are treated as sales and are accounted for as reductions in trade accounts receivable. During the three and six months ended June 30, 2019, the Company sold $14.9 million and $35.6 million of receivables, respectively and recognized a $3.5 million and $7.2 million gain on sale, respectively, consisting of the difference between the sales price and the carrying value of the receivables, which is recorded within other revenue. Cash proceeds from the transfer of these receivables are recorded in operating activities in the statements of cash flows.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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