Allowance for Doubtful Accounts

12 Months Ended

Dec. 31, 2020

Allowance for Credit Losses

The Company adopted ASU No. 2016-13 on January 1, 2020. See Note 2, Summary of Significant Accounting Policies, for a discussion of the ASU and the impact of adoption. As a result of the adoption, the Company amended its accounting policies for the allowance for credit losses. In accordance with ASU No. 2016-13, the Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss model. The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist. Where financial instruments do not share risk characteristics, they are evaluated on an individual basis. The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. A higher allowance for credit losses was recorded during the year ended December 31, 2020 due to the adverse impact the COVID-19 pandemic has had and likely will have on factors that affect the Company’s estimate of future credit losses.

Prior to the adoption of ASU No. 2016-13, the allowance for credit losses was based upon specific identification of likely and probable losses. Each accounting period, accounts receivable was evaluated for risk associated with a client’s inability to make contractual payments, historical experience, and other currently available information.

Activity in the allowance for credit losses is summarized as follows for the years presented (in thousands):


	Year Ended December 31,
	2020		2019		2018
Balance at December 31	$	464	$	810	$	1,272
Impact of ASU No. 2016-13 adoption	423		—		—
Opening balance at January 1	887		810		1,272
Charges to expense, net of recoveries	855		428		393
Uncollected balances written off	(677)		(774)		(855)
Balance at December 31	$	1,065	$	464	$	810