Supplemental Financial Statement Disclosures

6 Months Ended

Jun. 30, 2022

Supplemental Financial Statement Disclosures [Abstract]

Supplemental Financial Statement Disclosures

2. Supplemental Financial Statement Disclosures

Accounts Receivable, Net

As of June 30, 2022, we reported accounts receivable of $308 million, net of allowance for credit losses of $11 million. As of December 31, 2021, we reported accounts receivable of $226 million, net of allowance for credit losses of $12 million. The changes in the allowance for credit losses were not material for the three and six months ended June 30, 2022. Management believes credit risk is mitigated since approximately 98% of the net revenue recognized for the three and six months ended June 30, 2022 was collected in advance of recognition.

Contract Liabilities

Contract liabilities included in other current liabilities was $287 million at June 30, 2022 and $306 million at December 31, 2021. During the six months ended June 30, 2022, Wayfair recognized $207 million of net revenue that was included in other current liabilities as of December 31, 2021.

Net revenue from contracts with customers is disaggregated by geographic region because this manner of disaggregation best depicts how the nature, amount, timing, and uncertainty of net revenue and cash flows are affected by economic factors. Refer to Note 10, Segment and Geographic Information, for additional detail.

Impairment and Other Charges

During the second quarter of 2022, Wayfair identified an indicator of impairment for one of our U.S. office locations, which was primarily due to current sublease market conditions. We performed an analysis and determined that the carrying amount of the asset group exceeded its fair value, which was calculated based on estimated future sublease income. As a result, we recorded a charge of $40 million during the second quarter of 2022, which included $32 million of non-cash impairment of the right-of-use (“ROU”) asset, $7 million for the non-cash impairment of fixed assets and the remainder for other items.

In the first quarter of 2021, Wayfair enacted a plan to consolidate certain customer service centers in identified U.S. locations to transition toward virtual service models. Factors that influenced our decision were our ability to utilize a greater use of remote and home office applications and our ability to provide superior customer care. As a result, we recorded a charge of $12 million during the second quarter of 2021, which included $6 million for the non-cash impairment of ROU assets, $5 million for the non-cash accelerated depreciation of fixed assets and the remainder for other items. The impairment of ROU assets represents the excess of estimated future remaining call center lease commitments over expected future sublease income in certain affected facilities.