Expected Credit Losses

9 Months Ended

Sep. 30, 2020

Expected Credit Losses

Expected Credit Losses

4. Expected Credit Losses

We are exposed to credit losses primarily through sales of products and services. Our expected loss allowance methodology for accounts receivable, notes receivable, and contract assets is developed using historical collection experience, published or estimated credit default rates for entities that represent our customer base, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Our monitoring activities include account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.

We considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and recorded additional credit loss expense of approximately $0.8 million during the nine months ended September 30, 2020.

We review receivables for U.S. and international customers separately to better reflect different published credit default rates and economic and market conditions.

The following table provides a roll-forward of the allowance for expected credit losses that is deducted from the amortized cost basis of accounts receivable, notes receivable, and contract assets to present the net amount expected to be collected (in thousands):

	Nine Months Ended September 30, 2020
		United States		Other countries		Total
Balance, beginning of period	$	1,395	$	172	$	1,567
Adoption of Topic 326, cumulative-effect adjustment to retained earnings		767		1		768
Provision for expected credit losses		578		115		693
Amounts written off charged against the allowance		(61)		(2)		(63)
Other, including dispositions and foreign currency translation		-		(3)		(3)
Balance, end of period	$	2,679	$	283	$	2,962

As of September  30, 2020, the allowance for expected credit losses for each type of customer receivable was as follows:

	September 30,
	2020
Accounts receivable and notes receivable, current	$	1,787
Contract assets, net		711
Long-term notes receivable, net of current portion		464
Total allowance for expected credit losses on customer receivables	$	2,962