Allowance for Doubtful Accounts

12 Months Ended

Jan. 02, 2021

Since mid-March 2020, our business has been significantly impacted by the COVID-19 pandemic. In March 2020, many countries, including the United States, took steps to restrict travel, temporarily close or enforce capacity restrictions in

businesses, schools and other public gathering spaces. Restrictions on public gatherings and attendance at retail or other establishments, including restaurants and recreational, sporting and other similar venues, continue to evolve and are expected to continue to remain in effect in some capacity until the COVID-19 pandemic has abated. These government mandates have forced many of our customers to seek government support in order to continue operating, to drastically curtail their dining options, to temporarily suspend operations or to cease operations entirely. In December 2020, two vaccines for COVID-19 were approved by the United States Food and Drug Administration and, as of the date hereof, a limited number of doses have been made available in the United States to certain frontline workers and at-risk individuals. However, it remains unclear when either of these vaccines or others will be widely available to the general American public. As a result, it remains unclear when and to what extent the COVID-19 pandemic will fully abate. Due to the impact that the COVID-19 pandemic had on our customers, particularly our restaurant and hospitality customers, and to reflect the increased collection risk associated with our customers, we significantly increased our allowance for doubtful accounts during fiscal year 2020.

A summary of the activity in the allowance for doubtful accounts for the last three fiscal years is as follows:


	2020		2019		2018
Balance as of beginning of year	$	30	$	29	$	26
Charged to costs and expenses	63		21		17
Adoption of ASU 2016-13 (see Note 3)	1		—		—
Customer accounts written off—net of recoveries	(27)		(20)		(14)
Balance as of end of year	$	67	$	30	$	29

This table excludes the vendor receivable related allowance for doubtful accounts of $5 million, $4 million, and $3 million as of January 2, 2021, December 28, 2019 and December 29, 2018, respectively.