RECEIVABLES

6 Months Ended

Dec. 31, 2021

Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract]

RECEIVABLES

NOTE 4: RECEIVABLES

Receivables, net of their related allowance, consist of the following:

(in 000s)
As of	December 31, 2021				June 30, 2021
	Short-term		Long-term		Short-term		Long-term
Loans to franchisees	$	19,030	$	28,654	$	9,497	$	28,026
Receivables for U.S. assisted and DIY tax preparation and related fees	6,326		3,681		41,900		3,793
H&R Block Instant RefundTM receivables	324		16		2,357		159
H&R Block Emerald Advance® lines of credit	246,970		1,791		8,248		8,089
Software receivables from retailers	1,886		—		2,910		—
Royalties and other receivables from franchisees	3,377		133		6,167		178
Wave payment processing receivables	3,062		—		2,187		—
Other	20,080		1,279		15,666		1,350
Total	$	301,055	$	35,554	$	88,932	$	41,595

Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets in the consolidated balance sheets.

LOANS TO FRANCHISEES – Franchisee loan balances consist of term loans made primarily to finance the purchase of franchises and revolving lines of credit primarily for the purpose of funding working capital needs. As of December 31, 2021 and June 30, 2021 loans with a principal balance of $0.1 million and $0.2 million, respectively, were more than 90 days past due. We had no loans to franchisees on non-accrual status.

H&R BLOCK INSTANT REFUNDTM PROGRAM – H&R Block Instant RefundTM amounts are generally received from the Canada Revenue Agency within 60 days of filing the client's return, with the remaining balance collectible from the client.

We review the credit quality of our Instant Refund receivables based on pools, which are segregated by the tax return year of origination, with older years being deemed more unlikely to be repaid. We establish an allowance for doubtful accounts at an amount that we believe represents the net realizable value. In December of each year we charge-off the receivables to an amount we believe represents the net realizable value.

Balances and amounts on non-accrual status and classified as impaired, or more than 60 days past due, by tax return year of origination, as of December 31, 2021 are as follows:

			(in 000s)
Tax return year of origination:	Balance		Non-Accrual
2020 and prior	$	340	$	340
	340		$	340
Allowance	—
Net balance	$	340

H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT – We review the credit quality of our purchased participation interests in Emerald AdvanceSM (EA) receivables based on pools, which are segregated by the fiscal year of origination, with older years being deemed more unlikely to be repaid. We establish an allowance for doubtful accounts at an amount that we believe represents the net realizable value. In December of each year we charge-off the receivables to an amount we believe represents the net realizable value.

Balances and amounts on non-accrual status and classified as impaired, or more than 60 days past due, by fiscal year of origination, as of December 31, 2021 are as follows:

(in 000s)
Fiscal year of origination:	Balance		Non-Accrual
2022	$	244,645	$	—
2021 and prior	7,499		7,499
Revolving loans	20,373		12,891
	272,517		$	20,390
Allowance	(23,756)
Net balance	$	248,761

ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for our EA and all other short-term and long-term receivables for the six months ended December 31, 2021 and 2020 is as follows:

(in 000s)
	EAs		All Other		Total
Balances as of July 1, 2021	$	27,704	$	60,272	$	87,976
Provision	12,429		2,210		14,639
Charge-offs, recoveries and other	(16,377)		(60,437)		(76,814)
Balances as of December 31, 2021	$	23,756	$	2,045	$	25,801
Balances as of July 1, 2020	$	32,034	$	52,166	$	84,200
Provision	11,913		4,064		15,977
Charge-offs, recoveries and other	(18,650)		(54,322)		(72,972)
Balances as of December 31, 2020	$	25,297	$	1,908	$	27,205