Notes receivable and Variable interest entities (“VIEs”) consideration

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Notes receivable and Variable interest entities (“VIEs”) consideration

Notes receivable and Variable interest entities (“VIEs”) consideration

Notes receivable consist primarily of amounts due to us related to the financing we offered to customers. We report notes receivable at the principal balance outstanding less an allowance for losses. We monitor the financial condition of the notes receivable and record provisions for estimated losses when we believe it is probable that the holders of the notes receivable will be unable to make their required payments. We charge interest at a fixed rate and interest income is calculated by applying the effective rate to the outstanding principal balance. The Company had notes receivable of $4,122 and $100 outstanding as of June 30, 2021 and December 31, 2020, respectively, with no loss reserved for the uncollectible balances.

The customers to whom we offer financing through notes receivables are VIEs. However, the Company is not a primary beneficiary, because we do not have power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance. The VIEs are not consolidated into the Company’s financial statements but rather disclosed in the notes to our financial statements under ASC 810-10-50-4. The maximum loss exposure is limited to the carrying value of notes receivable as of the balances sheet dates.

At June 30, 2021, we had agreements to provide loans to our customers for $11,348. $4,183 was drawn on those commitments as of June 30, 2021. The funding under certain loan agreements is contingent on reaching certain milestones defined by the agreements.