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Trade receivables - Net

12 Months Ended

Dec. 31, 2019

Trade and other receivables [abstract]

Trade receivables – Net

The average collection period on sales of goods is between 30 and 60 days. No interest is charged on the outstanding accounts receivables from clients. The Company has recognized an allowance for doubtful accounts to show the possible financial loss caused by the inability of customers to make the corresponding payments. Allowances for doubtful accounts are calculated based on several factors including price adjustments, likelihood of recovery, aging and historical experience.

Credit limits and credit scores of customer are reviewed twice a year. On December 31, 2019 and 2018 there were no customers who represent more than 5% of the total balance of trade receivables. The Company does not hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

Trade receivables disclosed below include amounts that are past due at the end of the reporting period for which the Company has not recognized an allowance for doubtful debts because there has not been a significant change in credit quality and the amounts are still considered recoverable. The Company does not hold any collateral. In general terms, the accounts receivable does not show impairment.

Age of net receivables that are past due were as follows:

	At December 31,
	2 0 1 9		2 0 1 8

30 - 60 days	$	279,048	$	221,996
61 - 90 days		121,790		57,119
91 + days		535,955		188,262
Total	$	936,793	$	467,377

During the years ended December 31, 2019 and 2018, the movement in the allowance for doubtful accounts was as follows:

	2 0 1 9		2 0 1 8

Balance at beginning of year	$	231,778	$	199,855
Provisions		4,529		7,486
Recoveries		(63)
Translations effects		854		24,437
Balance at end of year	$	237,098	$	231,778

In determining the nonrecoverable portion of accounts receivable, the Company considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is minimum, due to the fact that the customer base is large and unrelated.

Republic made an agreement with a third party ("buyer") to carry out a factoring of accounts receivable to customers. The maximum established amount of advances related to the allocation of accounts is USD $ 30 million. The remaining amount between the received and the value of the invoices is kept in reserve by the "buyer". The payments of the funds retained in reserve minus a discount will be made by the buyer within 4 days after receiving the collection payments related to each assigned account. Said discount will be made on the total of the invoice and is in a range of 1% if the payment is made within 15 days (from the advance date) or up to 3.75% if paid within 90 days and 1% for every additional fifteen days until the account is settled. This discount is recognized as an interest expense in the consolidated statement of comprehensive income.

The purchaser has no recourse against the Company if payments are not received due to insolvency of an account debtor within 120 days of the invoice date. However, while the facility calls for the sale, assignment, transfer and conveyance of all rights, title and interests in the selected accounts receivable, the purchaser may put and charge-back any receivable not paid to the purchaser within 90 days of purchase for any reason besides insolvency of the account debtor. As collateral for the repayment of advances for receivables sold, the purchaser has a priority security interest in all accounts receivable of the Company (as defined by the Uniform Commercial Code of the United States of America).

In 2019, the Company sold a nominal amount of USD $ 11.2 million ($23.1 million in 2018) of accounts receivable. The discount fees incurred by this contract were approximately USD $ 0.3 million in 2019 and USD$ 0.5 in 2018. These fees were included in expenses for interest in the Consolidated Statement of Comprehensive Income. As of December 31, 2019, and 2018 the buyer has USD$ 0.0 million and USD$ 2.7 million, respectively, of receivables that have not been recovered by the buyer.