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Off-Balance Sheet Arrangements | 12 Months Ended
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Dec. 31, 2020
Receivables [Abstract] |
Off-Balance Sheet Arrangements |
13. | Off-Balance Sheet Arrangements
WEX Europe Services Accounts Receivable Factoring Under a factoring arrangement between WEX Europe Services and an unrelated third-party financial institution, the Company sells customer accounts receivable balances without recourse to the extent that the customer balances 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. The Company continues to service these receivables post-transfer with no participating interest. 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 $452.2 million and $630.3 million of accounts receivable under this arrangement during the years ended December 31, 2020 and 2019, respectively. Proceeds received, which are recorded net of applicable costs, including interest and commissions, are recorded in operating activities in the consolidated statements of cash flows. The loss on factoring was $2.4 million and $3.5 million for the years ended December 31, 2020 and 2019, respectively, and was recorded within cost of services in the consolidated statements of income. As of December 31, 2020 and 2019, the amount of outstanding transferred receivables in excess of the established credit limit was immaterial. Charge-backs on balances in excess of the credit limit during the year ended December 31, 2020 and 2019 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 its 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 $4.1 billion and $14.8 billion of trade accounts receivable under this arrangement during the years ended December 31, 2020 and 2019, respectively. Proceeds received, which are reported net of a negotiated discount rate, are recorded in operating activities in the consolidated statements of cash flows. The loss on factoring, which is recorded within cost of services in the consolidated statements of operations, was insignificant and $3.7 million for the years ended December 31, 2020 and 2019, respectively. WEX Latin America Securitization of Receivables Prior to the sale of WEX Latin America on September 30, 2020, the Company transferred certain unsecured receivables associated with its salary advance payment card product to an investment fund in which WEX Latin America held a non-controlling equity interest, and that is managed by an unrelated third-party. During the year ended December 31, 2020, the Company received an insignificant distribution from the investment fund and did not make equity contributions to the investment fund during the year ended December 31, 2019. During the year ended December 31, 2018, the Company’s equity contributions to the investment fund totaled $2.8 million. The securitization arrangement met the derecognition conditions under GAAP and transfers beginning July 1, 2018 under this arrangement were treated as sales and accounted for as a reduction of trade receivables. During the year ended December 31, 2018, the Company recognized operating interest expense of $4.4 million under this financing arrangement. During the years ended December 31, 2020 and 2019, the Company recognized a gain on sale of $6.5 million and $16.1 million, respectively. The gain recognized consists of the difference between the sales price and the carrying value of the receivables, and is recorded within other revenue. Cash proceeds from the transfer of these receivables are recorded within operating activities in the consolidated 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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