RECEIVABLES

3 Months Ended

Sep. 30, 2023

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	September 30, 2023				June 30, 2023
	Short-term		Long-term		Short-term		Long-term
Loans to franchisees	$	11,209	$	19,443	$	6,344	$	19,206
Receivables for U.S. assisted and DIY tax preparation and related fees	11,580		3,756		11,061		6,824
H&R Block's Instant RefundSM receivables	6,328		331		8,499		414
H&R Block Emerald Advance®	8,253		8,281		10,834		7,089
Software receivables from retailers	1,161		—		1,650		—
Royalties and other receivables from franchisees	5,026		—		3,416		—
Wave payment processing receivables	1,236		—		964		—
Other	15,537		967		17,219		1,108
Total	$	60,330	$	32,778	$	59,987	$	34,641

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 September 30, 2023 and June 30, 2023, loans with a principal balance more than 90 days past due, or on non-accrual status, are not material.

H&R BLOCK'S INSTANT REFUNDSM – H&R Block's Instant RefundSM 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 credit losses at an amount that we believe reflects the receivable at net realizable value. In December of each year, we charge-off the receivables and the related allowance 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 September 30, 2023 are as follows:

			(in 000s)
Tax return year of origination	Balance		More Than 60 Days Past Due
2022	$	8,392	$	7,800
2021 and prior	232		232
	8,624		$	8,032
Allowance	(1,965)
Net balance	$	6,659

H&R BLOCK EMERALD ADVANCE® – Historically, Emerald Advance® lines of credit (EA LOCs) have been offered to clients in our offices from mid-November through mid-January. If the borrower met certain criteria as agreed in the loan terms, the line of credit could be utilized year-round (Revolving Loan). In fiscal year 2024, EAs are being offered as term loans (EA TLs), and we are discontinuing the EA LOCs, including the Revolving Loans. See note 8 for discussion of the new EA TL.

We review the credit quality of our purchased participation interests in 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 credit losses at an amount that we believe reflects the receivable at net realizable value. Typically, in December of each year, we charge-off the receivables and the related allowance for EA LOCs, excluding Revolving Loans, to an amount we believe represents the net realizable value. However, due to the discontinuation of EA LOCs, we have charged-off the receivables and the related allowance of EA LOCs and Revolving Loans to an amount that we believe represents net realizable value as of September 30, 2023.

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 September 30, 2023 are as follows:

(in 000s)
Fiscal year of origination	Balance		Non-Accrual
2023 – Lines of credit	$	11,643	$	11,643
2022 and prior – Lines of credit	2,951		2,951
Revolving Loans	1,940		1,129
	16,534		$	15,723
Allowance	—
Net balance	$	16,534

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 three months ended September 30, 2023 and 2022 is as follows:

(in 000s)
	EAs		All Other		Total
Balances as of July 1, 2023	$	27,386	$	35,108	$	62,494
Provision for credit losses	328		770		1,098
Charge-offs, recoveries and other	(27,714)		(409)		(28,123)
Balances as of September 30, 2023	$	—	$	35,469	$	35,469
Balances as of July 1, 2022	$	26,141	$	51,126	$	77,267
Provision for credit losses	—		1,077		1,077
Charge-offs, recoveries and other	—		(1,281)		(1,281)
Balances as of September 30, 2022	$	26,141	$	50,922	$	77,063