Current Expected Credit Losses

3 Months Ended

Mar. 31, 2020

The Company has identified accounts receivable and vendor rebates receivable as portfolio segments in accordance with ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326).

Accounts Receivable

The allowance for expected credit losses reflects the Company's estimate of credit exposure. This estimate is based on an assessment of historical write-off experience, aging of receivables, significant individual account credit risk, current economic conditions, and the Company’s expectation of future economic conditions.

The Company’s accounts receivable are primarily from customers in the construction industry located in the United States and Canada. Concentration of credit risk with respect to accounts receivable is limited due to the large number of customers comprising the Company’s customer base. The Company performs credit evaluations of its customers; however, the Company’s policy is generally not to require collateral. As of March 31, 2020, the Company had no significant concentrations of credit risk.

Vendor Rebates Receivable

The Company receives rebates from certain vendors based primarily on the volume of inventory purchases. Throughout the year, the amount of vendor rebates receivable for the periodic programs are recorded when the related inventory is received and in certain circumstances are estimated based upon the expected annual level of purchases. The Company continually revises these estimates to reflect actual rebates earned. Historically, actual vendor rebates have not been materially different from management’s original estimates and have been unrelated to the Company’s inability to collect payment from a vendor.

The change in the allowance for expected credit losses from December 31, 2019 to March 31, 2020, consists of the following (in thousands):


	Allowance for Expected Credit Losses
Balance at December 31, 2019	$	(3,169)
Provision for expected credit losses	(652)
Write-offs	1,630
Recoveries	(21)
Balance at March 31, 2020	$	(2,212)