Allowance for Credit Losses

9 Months Ended

Sep. 30, 2023

Note D - Allowance for Credit Losses

The allowance for credit losses on trade receivables is determined by estimating and recognizing lifetime expected losses, rather than incurred losses, which results in the earlier recognition of credit losses even if the expected risk of credit loss is remote. As part of our analysis, we apply credit loss rates to outstanding receivables by aging category. For certain clients, we perform a quarterly credit review, which considers the client’s credit rating and financial position as well as our total credit loss exposure. Trade receivables are written off after all reasonable collection efforts have been exhausted. Recoveries of trade receivables previously written off are recorded when received and are immaterial for the three and nine months ended September 30, 2023.

The following table presents the activity within the allowance for credit losses on trade receivables for the nine months ended September 30, 2023 (in thousands):




Allowance for credit losses, January 1, 2023	$	1,006
Current period provision	560
Write-offs charged against the allowance, net of recoveries of amounts previously written off	(708)

Allowance for credit losses, September 30, 2023	$	858

The allowances on trade receivables presented in the Unaudited Condensed Consolidated Balance Sheets include $0.6 million at September 30, 2023 and December 31, 2022, for reserves unrelated to credit losses.