Expected Credit Losses

6 Months Ended

Jun. 30, 2024

Expected Credit Losses

Expected Credit Losses

Note 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, contract assets, notes receivable and off-balance-sheet exposures 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 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 for finance receivables and off-balance-sheet exposures. The expected credit losses for receivables are deducted from the amortized cost basis of accounts receivable, contract assets and notes receivable to present the net amount expected to be collected (in thousands):

	Six Months Ended June 30, 2024
	United States		Other countries		Total
Balance, beginning of period	$	3,369	$	597	$	3,966
Provision for expected credit losses		1,991		250		2,241
Amounts written off charged against the allowance		(399)		(71)		(470)
Other, including foreign currency translation		—		15		15
Balance, end of period	$	4,961	$	791	$	5,752

As of June 30, 2024 and December 31, 2023, the allowance for expected credit losses for each type of customer receivable and off-balance-sheet exposures were as follows (in thousands):

	June 30, 2024		December 31, 2023
Accounts receivable and notes receivable, current	$	3,258	$	2,392
Contract assets, net		2,445		1,516
Long-term notes receivable, net of current portion		49		44
Other current liabilities		—		14
Total allowance for expected credit losses on customer receivables	$	5,752	$	3,966