Current Expected Credit Losses (CECL)

3 Months Ended

Mar. 31, 2020

Credit Loss [Abstract]

Current Expected Credit Losses (CECL)

26.Current Expected Credit Losses (CECL)

The Company manages its receivable portfolios using past-due status as a key credit quality indicator.

The below table presents portfolio segmentation of the Company’s receivables disaggregated by credit quality indicators and origination periods as of March 31, 2020 (in thousands):

	Amortized Cost Basis by Origination Year and Past-Due Status
	Total		2020		2019		2018		2017		Prior
Accrued commissions receivable
Past-due status:
Less than 1 year	$	371,270	$	272,074	$	99,196	$	—	$	—	$	—
1 year - less than 2 years		34,468		—		14,183		20,285		—		—
2 years and greater		16,156		—		—		5,114		6,878		4,164
Total Accrued commissions receivable	$	421,894	$	272,074	$	113,379	$	25,399	$	6,878	$	4,164
Employee-related receivables
Past-due status:
Less than 1 year	$	3,009	$	605	$	2,404	$	—	$	—	$	—
1 year - less than 2 years		1,888		—		919		969		—		—
2 years and greater		1,325		—		—		83		375		867
Total Employee-related receivables	$	6,222	$	605	$	3,323	$	1,052	$	375	$	867

The CECL reserve reflects management’s current estimate of potential credit losses related to the receivable balances included in the Company’s unaudited condensed consolidated statements of financial condition. See Note 3—“Summary of Significant Accounting Policies” for further discussion of the CECL reserve methodology.

The following table presents the activity in the CECL reserve by receivable class for the three months ended March 31, 2020 (in thousands):

	Allowance Rollforward by Portfolio Segment
	Accrued commissions receivable		Employee-related receivables		Total
Beginning balance, January 1, 2020	$	811	$	1,133	$	1,944
Current-period provision for expected credit losses		179		586		765
Write-offs charged against the allowance		—		—		—
Recoveries collected		—		—		—
Ending balance, March 31, 2020	$	990	$	1,719	$	2,709

As described in Note 1—“Organization and Basis of Presentation” upon adoption of the new credit losses guidance on January 1, 2020, the Company recognized an initial CECL reserve of approximately $1.9 million against its receivables portfolio with a corresponding charge to retained deficit on unaudited condensed consolidated statements of changes in equity. As required, any subsequent changes to the CECL reserve are recognized in Net income (loss) available to common stockholders in the Company’s unaudited condensed consolidated statements of operations. During the three months ended March 31, 2020, the Company recorded an approximately $0.8 million increase in the expected credit loss reserve against the receivables portfolio, bringing the Company’s total CECL reserve to approximately $2.7 million as of March 31, 2020. The increase in the CECL reserve against Accrued commissions receivable reflects the updated macroeconomic assumptions resulting from the COVID-19 pandemic and downward credit rating migration of certain receivables in the portfolio. The increase in the CECL reserve pertaining to Employee-related receivables is a result of employee terminations.