NOTE 16: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION AND DISCONTINUED OPERATIONS

Supplemental Consolidated Financial Information

The following table provides information on net amounts included in our consolidated balance sheets:



	September 30,
	2018			2017

	(in thousands)
Gross pawn service charges receivable	$	49,629		$	42,117
Allowance for uncollectible pawn service charges receivable	(11,311		)	(10,569		)
Pawn service charges receivable, net	$	38,318		$	31,548

Gross inventory	$	176,198		$	161,212
Inventory reserves	(9,201		)	(6,801		)
Inventory, net	$	166,997		$	154,411

Prepaid expenses and other	$	9,402		$	9,250
Accounts receivable and other	20,933			19,515
Restricted cash	267			—
2019 Convertible Notes Hedges	2,552			—
Prepaid expenses and other current assets	$	33,154		$	28,765

Property and equipment, gross	$	253,022		$	224,240
Accumulated depreciation	(179,373		)	(166,281		)
Property and equipment, net	$	73,649		$	57,959

Trade accounts payable	$	10,500		$	13,064
Accrued payroll	6,294			4,860
Bonus accrual	12,406			9,010
Other payroll related expenses	2,963			3,922
Accrued interest	3,835			2,212
Accrued rent and property taxes	12,106			11,357
Deferred revenues	2,661			2,483
Other accrued expenses	4,064			8,310
Income taxes payable	1,161			1,465
Unrecognized tax benefits	1,810			4,860
Account payable, accrued expenses and other current liabilities	$	57,800		$	61,543

Unrecognized tax benefits, non-current	$	1,148		$	1,758
Other long-term liabilities	5,742			5,297
Other long-term liabilities	$	6,890		$	7,055

Discontinued Operations

In September 2016 we completed the sale of all of our interests in Grupo Finmart to AlphaCredit. The information presented below includes the assets, liabilities, revenues and expenses of variable interest entities which were deconsolidated as a result of the sale of Grupo Finmart. As a result of the decision to sell the Grupo Finmart business, we classified Grupo Finmart as held for sale as of June 30, 2016 and recast all segment operations of Grupo Finmart as discontinued operations. As of the completion of the disposition, Grupo Finmart is no longer a subsidiary of EZCORP and neither Grupo Finmart nor AlphaCredit is considered to be a related party to EZCORP. See Note 5 for additional information regarding our continuing involvement with Grupo Finmart.

We recognized immaterial amounts related to discontinued operations in fiscal 2018 and 2017. The following table presents the reconciliation of the major line items constituting "Loss from discontinued operations, net of tax" of Grupo Finmart and other operations discontinued prior to the adoption of ASU 2014-08 that are presented in the consolidated statements of operations for fiscal 2016 (in thousands):



Revenues	$	45,256
Consumer loan bad debt	(30,081		)
Operations expense	(111,984		)
Interest expense, net	(16,464		)
Depreciation, amortization and other expenses	(12,732		)
Gain on disposition	34,237
Loss from discontinued operations before income taxes of Grupo Finmart	(91,768		)
Income tax benefit	12,896
Loss from discontinued operations, net of tax of operations discontinued prior to the adoption of ASU 2014-08	(560		)
Loss from discontinued operations, net of tax	$	(79,432	)

Loss from discontinued operations, net of tax of Grupo Finmart	$	(78,872	)
Loss from discontinued operations, net of tax of Grupo Finmart attributable to noncontrolling interest	6,661
Loss from discontinued operations, net of tax of Grupo Finmart attributable to EZCORP, Inc.	$	(72,211	)

There were immaterial cash flows from Grupo Finmart operating and investing activities for fiscal 2018 and 2017. Cash flows from Grupo Finmart operating and investing activities for fiscal 2016 were $2.2 million and $42.7 million, respectively. During the second quarter of fiscal 2016, we recorded an impairment of $73.2 million included under "Loss from discontinued operations, net of tax" in our consolidated statements of operations, the entire amount of the goodwill associated with our previous Grupo Finmart reporting unit. Total revenue included in “Loss from discontinued operations, net of tax” was $2.1 million during fiscal 2016, exclusive of Grupo Finmart revenue.

Valuation and Qualifying Accounts

The following table provides information on our valuation and qualifying accounts not disclosed elsewhere:



			Additions
Description	Balance at Beginning of Period		Charged to Expense		Charged to Revenue		Deductions			Balance at End of Period

	(in thousands)
Allowance for valuation of inventory:
Year Ended September 30, 2018	$	6,801	$	2,400	$	—	$	—		$	9,201
Year Ended September 30, 2017	6,143		658		—		—			6,801
Year Ended September 30, 2016	7,090		—		—		947			6,143
Allowance for uncollectible pawn service charges receivable:
Year Ended September 30, 2018	$	10,569	$	—	$	742	$	—		$	11,311
Year Ended September 30, 2017	10,396		—		173		—			10,569
Year Ended September 30, 2016	9,025		—		1,371		—			10,396
Allowance for uncollectible consumer loan fees and interest receivable:
Year Ended September 30, 2018	$	283	$	—	$	48	$	—		$	331
Year Ended September 30, 2017	241		—		42		—			283
Year Ended September 30, 2016	12,045		—		—		11,804		*	241
Allowance for valuation of deferred tax assets:
Year Ended September 30, 2018	$	17,860	$	2,394	$	—	$	—		$	20,254
Year Ended September 30, 2017	21,078		—		—		3,218			17,860
Year Ended September 30, 2016	19,567		1,511		—		—			21,078


*	Includes $9.2 million in allowance that was deconsolidated as a result of the disposition of Grupo Finmart as discussed above.