Expected Credit Losses

9 Months Ended

Sep. 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, 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 is 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):

	Nine Months Ended September 30, 2023
	United States		Other countries		Total
Balance, beginning of period	$	3,064	$	566	$	3,630
Provision for expected credit losses		733		146		879
Amounts written off charged against the allowance		(719)		(105)		(824)
Other, including foreign currency translation		—		8		8
Balance, end of period (1)	$	3,078	$	615	$	3,693

(1) Ending balance includes allowance for credit losses recorded in Other current liabilities on the Consolidated Balance Sheet which is related to off-balance-sheet credit exposurse.

As of September 30, 2023 and December 31, 2022, the allowance for expected credit losses for each type of customer receivable and off-balance-sheet exposures were as follows (in thousands):

	September 30, 2023		December 31, 2022
Accounts receivable and notes receivable, current	$	2,144	$	2,176
Contract assets, net		1,476		1,360
Long-term notes receivable, net of current portion		59		94
Other current liabilities		14		—
Total allowance for expected credit losses on customer receivables	$	3,693	$	3,630