Analysis: Nature of Business, Basis of Reporting, Significant Accounting Policies, Revenues Recognition

CIK 0000007084
Accession number 0000007084-14-000011
Link to XBRL instance
Fiscal year end --12-31
Fiscal year focus 2013
Fiscal period focus FY
Current balance sheet date 2013-12-31
Current year-to-date income statement start date 2013-01-01

Commentary Filer created the extension concept adm:SummaryOfSignificantAccountingPoliciesAndNewAccountingStandardsTextBlock to express both significant accounting policies and new accounting standards adoption information.

NATURE OF BUSINESS concept us-gaap:NatureOfOperations
Nature of Business

The Company is principally engaged in procuring, transporting, storing, processing, and merchandising agricultural commodities and products.

BASIS OF REPORTING concept us-gaap:ConsolidationPolicyTextBlock
Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All significant intercompany accounts and transactions have been eliminated.  The Company consolidates all entities, including variable interest entities (VIEs), in which it has a controlling financial interest. For VIEs, the Company assesses whether it is the primary beneficiary as defined under the applicable accounting standard. Investments in affiliates, including VIEs through which the Company exercises significant influence but does not control the investee and is not the primary beneficiary of the investee's activities, are carried at cost plus equity in undistributed earnings since acquisition and are adjusted, where appropriate, for basis differences between the investment balance and the underlying net assets of the investee.  The Company’s portion of the results of certain affiliates and results of certain VIEs are included using the most recent available financial statements.  In each case, the financial statements are within 93 days of the Company’s year end and are consistent from period to period.  

The Company consolidates Alfred C. Toepfer International (Toepfer), in which the Company has an 80% interest, for which the minority interest was subject to a mandatorily redeemable put option.  As a result of the put option, the associated minority interest was reported in other long-term liabilities.  On December 31, 2011, the put option expired and the Company reclassified $174 million of minority interest from other long-term liabilities to noncontrolling interests in shareholders’ equity at that date. During 2013, Toepfer became subject to a new mandatorily redeemable put option; and as a result, the Company reclassified $180 million of noncontrolling interest in shareholders' equity to long-term liabilities.


REVENUE RECOGNITION concept us-gaap:RevenueRecognitionPolicyTextBlock

The Company follows a policy of recognizing sales revenue at the time of delivery of the product and when all of the following have occurred: a sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured.  The Company has sales contracts that allow for pricing to occur after title of the goods has passed to the customer.  In these cases, the Company continues to report the goods in inventory until it recognizes the sales revenue once the price has been determined.  Freight costs and handling charges related to sales are recorded as a component of cost of products sold.

Net sales to unconsolidated affiliates during the years ended December 31, 2013 and 2012, the six months ended December 31, 2012 and  2011, and the years ended June 30, 2012 and 2011, were $6.9 billion, $7.2 billion, $4.0 billion, $4.5 billion, $7.7 billion, and $7.1 billion, respectively.


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