Allowance for Doubtful Accounts and Sales Reserves

3 Months Ended

Mar. 31, 2020

Credit Loss [Abstract]

Allowance for Doubtful Accounts and Sales Reserves

Allowance for Doubtful Accounts and Sales Reserves

The following table summarizes the changes in the allowances applied to accounts receivable and contract assets for the three months ended March 31, 2020 (in thousands):

	Accounts Receivable Reserve			Contract Asset Reserve
Balance at December 31, 2019	$	2,662		$	205
Adoption of new accounting standard	—			609
Provision	676			952
Recoveries	(306		)	(13		)
Charge-offs	(170		)	(10		)
Balance at March 31, 2020	$	2,862		$	1,743

During the three months ended March 31, 2020, we analyzed the risk associated with each portfolio segment within our accounts receivables and contract assets balances. Our historical loss rates have not shown any significant differences between customer industries or geographies, and, upon adoption of ASC 326, we grouped all accounts receivables and contract assets into a single portfolio. Subsequently, however, as a result of the economic uncertainties caused by the impact of the COVID-19 pandemic, we reassessed our portfolio into pools using different risk profiles. We increased our expected credit loss rates for customers in industries that we forecast will be more adversely impacted by the economic downturn caused by the COVID-19 pandemic. As the COVID-19 pandemic has had adverse impacts across all major geographies in which our customers reside, we have not forecasted significant differences in loss rates across geographies. As discussed in Note 3, Revenue, we do not have significant international geographic concentrations of revenue, and, as a result, we do not have significant concentrations of accounts receivables or contract assets in any single geography outside of the United States. This increase in expected credit losses due to the COVID-19 pandemic resulted in the recognition of an additional $0.8 million in expected credit losses, which is recorded in general and administrative expense in our condensed consolidated statements of operations and comprehensive income (loss).