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Receivables and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Receivables and Allowance for Credit Losses
Note 3 – Receivables and Allowance for Credit Losses

Our portfolio of receivables is comprised of two portfolio segments: accounts receivable and EIP receivables. Our accounts receivable segment primarily consists of amounts currently due from customers, including service and leased device receivables, other carriers and third-party retail channels.

Based upon customer credit profiles, we classify the EIP receivables segment into two customer classes of “Prime” and “Subprime.” Prime customer receivables are those with lower delinquency risk and Subprime customer receivables are those with higher delinquency risk. Customers may be required to make a down payment on their equipment purchases. In addition, certain customers within the Subprime category are required to pay an advance deposit.

To determine a customer’s credit profile, we use a proprietary credit scoring model that measures the credit quality of a customer using several factors, such as credit bureau information, consumer credit risk scores and service and device plan characteristics.

The following table summarizes the EIP receivables, including imputed discounts and related allowance for credit losses:
(in millions)December 31, 2019December 31, 2018
EIP receivables, gross$4,582  $4,534  
Unamortized imputed discount(299) (330) 
EIP receivables, net of unamortized imputed discount4,283  4,204  
Allowance for credit losses(100) (119) 
EIP receivables, net$4,183  $4,085  
Classified on the balance sheet as:
Equipment installment plan receivables, net$2,600  $2,538  
Equipment installment plan receivables due after one year, net1,583  1,547  
EIP receivables, net$4,183  $4,085  

To determine the appropriate level of the allowance for credit losses, we consider a number of credit quality factors, including historical credit losses and timely payment experience as well as current collection trends such as write-off frequency and severity, aging of the receivable portfolio, credit quality of the customer base and other qualitative factors such as macro-economic conditions.

We write off account balances if collection efforts are unsuccessful and the receivable balance is deemed uncollectible, based on factors such as customer credit ratings and the length of time from the original billing date.

For EIP receivables, subsequent to the initial determination of the imputed discount, we assess the need for and, if necessary, recognize an allowance for credit losses to the extent the amount of estimated incurred losses on the gross EIP receivable balances exceed the remaining unamortized imputed discount balances.

The EIP receivables had weighted average effective imputed interest rates of 8.8% and 10.0% as of December 31, 2019, and 2018, respectively.
Activity for the years ended December 31, 2019, 2018 and 2017, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:
December 31, 2019December 31, 2018December 31, 2017
(in millions)Accounts Receivable AllowanceEIP Receivables AllowanceTotalAccounts Receivable AllowanceEIP Receivables AllowanceTotalAccounts Receivable AllowanceEIP Receivables AllowanceTotal
Allowance for credit losses and imputed discount, beginning of period$67  $449  $516  $86  $396  $482  $102  $316  $418  
Bad debt expense77  230  307  69  228  297  104  284  388  
Write-offs, net of recoveries(83) (249) (332) (88) (240) (328) (120) (273) (393) 
Change in imputed discount on short-term and long-term EIP receivablesN/A  136  136  N/A  250  250  N/A  252  252  
Impact on the imputed discount from sales of EIP receivablesN/A  (167) (167) N/A  (185) (185) N/A  (183) (183) 
Allowance for credit losses and imputed discount, end of period$61  $399  $460  $67  $449  $516  $86  $396  $482  

Management considers the aging of receivables to be an important credit indicator. The following table provides delinquency status for the unpaid principal balance for receivables within the EIP portfolio segment, which we actively monitor as part of our current credit risk management practices and policies:
December 31, 2019December 31, 2018
(in millions)PrimeSubprimeTotal EIP Receivables, grossPrimeSubprimeTotal EIP Receivables, gross
Current - 30 days past due$2,384  $2,108  $4,492  $1,987  $2,446  $4,433  
31 - 60 days past due13  28  41  15  32  47  
61 - 90 days past due7  17  24  6  19  25  
More than 90 days past due7  18  25  7  22  29  
Total receivables, gross$2,411  $2,171  $4,582  $2,015  $2,519  $4,534