Note 12 - Accounts Receivable and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

12 – Accounts Receivable and Allowance for Credit Losses

The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. Under Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Company is required to remeasure expected credit losses for financial instruments held on the reporting date based on historical experience, current conditions and reasonable forecasts.

Accounts receivable consists primarily of commercial vehicle sales receivables, manufacturers’ receivables, leasing and rental receivables, parts and service receivables and other trade receivables. The Company maintains an allowance for credit losses based on the probability of default, its historical rate of losses, aging and current economic conditions. The Company writes off account balances when it has exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against the allowance for credit losses.

The following table summarizes the changes in the allowance for credit losses (in thousands):

	Balance December 31, 2021		Provision for the Six Months Ended June 30, 2022		Write offs Against Allowance, net of Recoveries			Balance June 30, 2022
Commercial vehicle receivables	$	76	$	53	$	−		$	129
Manufacturers’ receivables		419		756		(552	)		623
Leasing, parts and service receivables		1,069		1,091		(798	)		1,362
Other receivables		26		−		(3	)		23
Total	$	1,590	$	1,900	$	(1,353	)	$	2,137