Expected Credit Losses

6 Months Ended

Jun. 30, 2023

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, 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 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):

	Six Months Ended June 30, 2023
	United States		Other countries		Total
Balance, beginning of period	$	3,064	$	566	$	3,630
Provision for expected credit losses		226		115		341
Amounts written off charged against the allowance		(402)		(104)		(506)
Balance, end of period	$	2,888	$	577	$	3,465

As of June 30, 2023 and December 31, 2022, the allowance for expected credit losses for each type of customer receivable was as follows (in thousands):

	June 30, 2023		December 31, 2022
Accounts receivable and notes receivable, current	$	1,950	$	2,176
Contract assets, net		1,447		1,360
Long-term notes receivable, net of current portion		68		94
Total allowance for expected credit losses on customer receivables	$	3,465	$	3,630