Trade Accounts Receivable

Trade accounts receivable less impairment losses amounted to €11,836 million (2017: €8,582 million) on the closing date and were comprised as follows: This increase was attributable to the acquired Monsanto business. There are significant concentrations in the following regions and countries:

Trade Accounts Receivable

 

 

2017

 

2018

 

 

€ million

 

€ million

North America

 

1,379

 

3,248

of which U.S.A.

 

1,291

 

3,066

Europe / Middle East / Africa

 

3,488

 

3,764

of which Germany

 

1,365

 

1,202

Asia / Pacific

 

1,648

 

2,054

Latin America

 

2,492

 

3,413

of which Brazil

 

1,668

 

1,952

Trade accounts receivable (before impairments)

 

9,007

 

12,479

Accumulated impairment losses

 

(425)

 

(643)

Carrying amount, December 31

 

8,582

 

11,836

of which noncurrent

 

97

 

665

Noncurrent trade accounts receivable comprised receivables of €540 million in connection with rights to use technologies that were outlicensed to a customer acquired through the acquisition of Monsanto. Beyond this, there are no material concentrations of individual customers.

The gross carrying amounts of trade accounts receivable were broken down as follows:

Trade Accounts Receivable – Gross Carrying Amounts

 

 

Trade accounts receivable for which lifetime expected credit losses are calculated (collectively assessed)

 

Trade accounts receivable that are credit-impaired

 

Total

 

 

€ million

 

€ million

 

€ million

Gross carrying amounts as of January 1, 2018

 

8,209

 

798

 

9,007

Changes resulting from trade accounts receivable recognized, derecognized or written-off in the reporting period

 

(1,714)

 

(535)

 

(2,249)

Transfer to credit-impaired trade accounts receivable

 

(367)

 

367

 

Other changes:

 

 

 

 

 

 

From acquisitions / divestments

 

6,015

 

16

 

6,031

From exchange differences

 

(276)

 

(34)

 

(310)

Gross carrying amounts as of December 31, 2018

 

11,867

 

612

 

12,479

Credit losses on trade accounts receivable were as follows:

Trade Accounts Receivable – Loss Allowances

 

 

Lifetime expected credit losses (collectively assessed)

 

Trade accounts receivable that are credit-impaired

 

Total

 

 

€ million

 

€ million

 

€ million

Loss allowances as of January 1, 2018

 

113

 

405

 

518

Changes resulting from loss allowances newly recognized or derecognized in the reporting period and additions / reductions to existing loss allowances

 

23

 

78

 

101

Changes due to write-offs

 

 

 

(27)

 

(27)

Transfer to loss allowances for credit-impaired trade accounts receivable

 

(106)

 

106

 

Other changes:

 

 

 

 

 

 

From changes in the scope of consolidation

 

101

 

16

 

117

From exchange differences

 

(19)

 

(47)

 

(66)

Loss allowances as of December 31, 2018

 

112

 

531

 

643

Receivables from government health service institutions, especially in Greece, Italy, Portugal and Spain, are under special observation in view of the government debt crisis. Although there were no material defaults on such receivables in 2018 or 2017, it is possible that future developments in these countries could result in payment delays and / or defaults. This could necessitate the recognition of impairment losses due to new occurrences. Trade accounts receivable from government health service institutions in the above countries at the end of 2018 totaled €103 million (2017: €102 million).

An excess-of-loss policy exists for the Pharmaceuticals, Consumer Health and Animal Health segments as part of a global credit insurance program. More than 80% of the receivables of these segments are insured up to a maximum total annual compensation payment of €150 million (2017: €150 million). A global excess-of-loss policy is in place for the Crop Science segment (excluding the newly acquired Monsanto business). In this global credit insurance program, more than 80% of this segment’s receivables are insured up to a maximum total annual compensation payment of €300 million (2017: €300 million). Local credit insurance contracts are in place in certain countries for the newly acquired Monsanto business.

A further €992 million (2017: €696 million) of receivables was secured by advance payments, letters of credit or guarantees or by liens on land, buildings or harvest yields.

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