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Off-Balance Sheet Arrangements | 9 Months Ended
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Sep. 30, 2021
Receivables [Abstract] |
Off-Balance Sheet Arrangements |
10. | 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. The agreement remains in effect through December 31, 2021, after which the agreement automatically renews annually unless either party gives not less than 90 days written notice of their intention to withdraw. 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 $148.0 million and $411.6 million of accounts receivable under this arrangement during the three and nine months ended September 30, 2021, respectively. For the three and nine months ended September 30, 2020, the Company sold $122.6 million and $327.2 million of accounts receivable under this arrangement, respectively. Proceeds received, which are recorded net of applicable costs, including interest and commissions, are recorded in operating activities in the condensed consolidated statements of cash flows. The loss on factoring, recorded within cost of services in the condensed consolidated statements of operations, was $0.7 million and $2.0 million for the three and nine months ended September 30, 2021, respectively. For the three and nine months ended September 30, 2020, the loss on factoring was insignificant and $1.7 million, respectively. As of September 30, 2021, the amount of outstanding transferred receivables in excess of the established credit limit was $0.6 million while this amount was immaterial as of December 31, 2020. Charge-backs on balances in excess of the credit limit during each of the nine months ended September 30, 2021 and 2020 were immaterial. WEX Bank Accounts Receivable Factoring Under a factoring agreement with an unrelated third-party financial institution, WEX Bank sells certain of its trade accounts receivable under non-recourse transactions. The agreement extends through August 2022, after which it can be renewed for successive one-year periods assuming WEX provides advance written notice that is accepted by the purchaser. 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 $1.3 billion and $1.9 billion of trade accounts receivable under this arrangement during the three and nine months ended September 30, 2021, respectively. During the three and nine months ended September 30, 2020, the Company sold $0.8 billion and $3.7 billion of accounts receivable under this arrangement, respectively. Proceeds received, which are reported net of a negotiated discount rate, are recorded in operating activities in the statements of cash flows. The loss on factoring, which is recorded within cost of services in the condensed consolidated statements of operations, was immaterial for the three and nine months ended September 30, 2021 and 2020, respectively.

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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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