13. ALLOWANCES

The changes in the allowance for doubtful accounts, inclusive of unapplied rebate reserves, and reserve for sales returns and allowances for the years ended December 31, 2015, 2014, and 2013, are as follows:

Consolidated reserves and allowances



	Allowance for doubtful accounts		Reserve for sales returns and allowances		Reserve for unapplied rebates		Total

	(in thousands)
Beginning balance at December 31, 2012	$	(3,441)	$	(7,086)	$	(2,788)	$	(13,315)
Reduction in revenue		-		(55,784)		(5,420)		(61,204)
Expense		(1,930)		-		-		(1,930)
Recoveries, applied amounts, and write-offs		1,715		57,460		6,761		65,936
Ending balance at December 31, 2013		(3,656)		(5,410)		(1,447)		(10,513)

Reduction in revenue		-		(69,834)		(5,397)		(75,231)
Expense		(12,087)		-		-		(12,087)
Recoveries, applied amounts, and write-offs		2,134		68,030		(4,725)		65,439
Ending balance at December 31, 2014		(13,609)		(7,214)		(11,569)		(32,392)

Reduction in revenue		-		(71,649)		(11,106)		(82,755)
Expense		(26,225)		-		-		(26,225)
Recoveries, applied amounts, and write-offs		3,466		74,224		14,318		92,008
Ending balance at December 31, 2015	$	(36,368)	$	(4,639)	$	(8,357)	$	(49,364)

During the year ended December 31, 2015, Crocs had multiple China distributors default on their payment obligations. As a result, the Company reassessed the collectability of its accounts receivable balances for its China operations and concluded that a significant increase in the allowance for doubtful accounts was required. Accordingly, Crocs has increased its China allowance for doubtful accounts by $23.2 million, resulting in total allowances in China of $36.4 million and $21.1 million as of December 31, 2015 and 2014, respectively. The Company’s net accounts receivable balance for its China operations as of December 31, 2015 and 2014 was $5.1 million and $17.5 million, respectively.

The changes in the allowance for doubtful accounts, inclusive of unapplied rebate reserves, and reserves for sale returns and allowances related to China operations for the years ended December 31, 2015, 2014, and 2013, are as follows:

China reserves and allowances



	Allowance for doubtful accounts		Reserve for sales returns and allowances		Reserve for unapplied rebates		Total

	(in thousands)
Beginning balance at December 31, 2012	$	(77)	$	(87)	$	(2,865)	$	(3,029)
Reduction in revenue		-		(2,371)		-		(2,371)
Expense		37		-		-		37
Recoveries, applied amounts, and write-offs		16		2,233		1,814		4,063
Ending balance at December 31, 2013		(24)		(225)		(1,051)		(1,300)

Reduction in revenue		-		(6,921)		-		(6,921)
Expense		(8,552)		-		-		(8,552)
Recoveries, applied amounts, and write-offs		136		3,103		(7,572)		(4,333)
Ending balance at December 31, 2014		(8,440)		(4,043)		(8,623)		(21,106)

Reduction in revenue		-		(7,769)		(3,511)		(11,280)
Expense		(23,163)		-		-		(23,163)
Recoveries, applied amounts, and write-offs		1,315		11,618		6,172		19,105
Ending balance at December 31, 2015	$	(30,288)	$	(194)	$	(5,962)	$	(36,444)

As of December 31, 2015 and 2014, China operations accounted for $41.6 million and $38.6 million, respectively, of the Company’s total gross accounts receivable balances, of which $38.2 million and $36.9 million, respectively, were past due. As of December 31, 2015 and 2014, China operations had total accounts receivable reserves of $36.4 million and $21.1 million, respectively, associated with these receivables.