ALLOWANCES

Changes in the allowance for doubtful accounts, the reserve for sales returns and allowances, and unapplied rebates were:



	Allowance for doubtful accounts			Reserve for sales returns and allowances			Reserve for unapplied rebates			Total
	(in thousands)
Beginning balance at January 1, 2014	$	3,656		$	5,410		$	1,447		$	10,513
Reduction in revenues	—			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 revenues	—			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
Reduction in revenues	—			72,995			9,036			82,031
Expense	6,079			—			—			6,079
Recoveries, applied amounts, and write-offs	(9,591		)	(71,513		)	(8,232		)	(89,336		)
Ending balance at December 31, 2016	$	32,856		$	6,121		$	9,161		$	48,138

During the year ended December 31, 2015, multiple China distributors defaulted on their payment obligations and, as a result, the Company recorded a $23.2 million charge in 2015 to increase the China allowance for doubtful accounts to $30.3 million at December 31, 2015. In addition to the allowance for doubtful accounts of $30.3 million, the Company also maintained China reserves for sales returns and allowances and unapplied rebates, bringing the total China allowances to $36.4 million as of December 31, 2015. As of December 31, 2015, China operations accounted for $41.6 million of the Company's gross receivables, of which $38.2 million were past due. Our net accounts receivable balance for our China operations as of December 31, 2015 was $5.1 million.

The Company addressed the declining collection rates experienced in 2015 from our China operations by limiting or terminating its relationship with certain distributors. Beginning in late 2015, the Company implemented a more restrictive credit policy for several China distributors and also expanded its relationship with other, financially stronger existing business partners.

Changes in the China allowance for doubtful accounts, the reserve for sales returns and allowances, and unapplied rebates were:



	Allowance for doubtful accounts			Reserve for sales returns and allowances			Reserve for unapplied rebates			Total
China Operations	(in thousands)
Beginning balance at January 1, 2014	$	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
Reduction in revenue	—			9,243			1,380			10,623
Expense	1,097			—			—			1,097
Recoveries, applied amounts, and write-offs	(5,752		)	(8,575		)	(1,013		)	(15,340		)
Ending balance at December 31, 2016	$	25,633		$	862		$	6,329		$	32,824