Accounts Receivable

12 Months Ended

Dec. 31, 2023

As of December 31, 2023 and 2022, Accounts receivable consisted of the following:


(in thousands)	December 31, 2023		December 31, 2022
Trade and other accounts receivable	$	272,351	$	179,676
Bank promissory notes	20,690		23,439
Allowance for expected credit losses	(5,260)		(3,097)
Accounts receivable, net	$	287,781	$	200,018

The Company had Noncurrent receivables in the AEC segment that represented revenue earned, for which the customer had extended payment terms beyond one year. In 2023, the payment terms were amended and a portion of the Noncurrent receivables are now included in Trade and other accounts receivable. The remaining Noncurrent receivables is expected to be collected in the first quarter of 2025. As of December 31, 2023 and December 31, 2022, Noncurrent receivables were as follows:


(in thousands)	December 31, 2023		December 31, 2022
Noncurrent receivables	$	4,414	$	28,053
Allowance for expected credit losses	(22)		(140)
Noncurrent receivables, net	$	4,392	$	27,913

Effective January 1, 2020, the Company adopted the provisions of ASC 326, Current Expected Credit Losses ("CECL"). This accounting update replaced the incurred loss impairment methodology under previous GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Under this standard, the Company recognizes an allowance for expected credit losses on financial assets measured at amortized cost, such as Accounts receivable, Contract assets and Noncurrent receivables. The allowance is determined using a CECL model that is based on an historical average three-year loss rate and is measured by financial asset type on a collective (pool) basis when similar risk characteristics exist, at an amount equal to lifetime expected credit losses. The estimate reflects the risk of loss due to credit default, even when the risk is remote, and considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable expected future economic conditions.

While an expected credit loss allowance is recorded at the same time the financial asset is recorded, the Company monitors financial assets for credit impairment events to assess whether there has been a significant increase in credit risk since initial recognition, and considers both quantitative and qualitative information. The risk of loss due to credit default increases when one or more events occur that can have a detrimental impact on estimated future cash flows of that financial asset. Evidence that a financial asset is subject to greater credit risk includes observable data about significant financial difficulty of the customer, a breach of contract, such as a default or past due event, or it becomes probable that the customer will enter bankruptcy or other financial reorganization, among other factors. It may not be possible to identify a single discrete event, but rather, the combined effect of several events that may cause an increase in risk of loss.

The probability of default is driven by the relative financial health of our customer base and that of the industries in which we operate, as well as the broader macro-economic environment. A changing economic environment or forecasted economic scenario can lead to a different probability of default and can suggest that credit risk has changed.

At each reporting period, the Company will recognize the amount of change in current expected credit losses as an allowance gain or loss in Selling, general, and administrative expenses in the Consolidated Statements of Income. Financial assets are written-off when the Company has no reasonable expectation of recovering the financial asset, either in its entirety, or a portion thereof. This is the case when the Company determines that the customer does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.

The following tables present the (increases)/decreases in the allowance for credit losses for Accounts receivable:


(in thousands)	December 31, 2022		(Charge)/ benefit		Currency translation		Other		December 31, 2023
Specific customer reserves	$	(2,076)	$	(424)	$	(74)	$	90	$	(2,484)
Incremental expected credit losses	(1,021)		(187)		(40)		(1,528)		(2,776)
Accounts receivable expected credit losses	$	(3,097)	$	(611)	$	(114)	$	(1,438)	$	(5,260)


(in thousands)	December 31, 2021		(Charge)/ benefit		Currency translation		Other		December 31, 2022
Specific customer reserves	$	(1,392)	$	(1,331)	$	50	$	597	$	(2,076)
Incremental expected credit losses	(953)		(93)		25		—		(1,021)
Accounts receivable expected credit losses	$	(2,345)	$	(1,424)	$	75	$	597	$	(3,097)

The following tables present the (increases)/decreases in the allowance for credit losses for Noncurrent receivables:


(in thousands)	December 31, 2022		(Charge)/ benefit		Currency translation		Other		December 31, 2023
Noncurrent receivables expected credit losses	$	(140)	$	123	$	(5)	$	—	$	(22)


(in thousands)	December 31, 2021		(Charge)/ benefit		Currency translation		Other		December 31, 2022
Noncurrent receivables expected credit losses	$	(200)	$	62	$	(2)	$	—	$	(140)