Allowance for Credit Losses

9 Months Ended

Sep. 30, 2020

The Company adopted ASU No. 2016-13 on January 1, 2020. See Note 3, Recent Accounting Pronouncements, for a discussion of the ASU and the impact of adoption. As a result of the adoption, the Company amended its accounting policies for the allowance for credit losses. In accordance with ASU No. 2016-13, the Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss model. The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist. Where financial instruments do not share risk characteristics, they are evaluated on an individual basis. The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. A higher allowance for credit losses was recorded during the nine months ended September 30, 2020 due to the likely adverse impact the COVID-19 pandemic has had and will have on factors that affect our estimate of future credit losses.

Activity in the allowance for credit losses is summarized as follows (in thousands):


	Nine Months Ended September 30, 2020
Balance at December 31, 2019	$	464
Impact of ASU No. 2016-13 adoption	423
Opening balance at January 1, 2020	887
Charges to expense	1,138
Uncollected balances written off, net of recoveries	(818)
Balance at September 30, 2020	$	1,207