RECEIVABLES

6 Months Ended

Dec. 31, 2022

Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract]

RECEIVABLES

NOTE 4: RECEIVABLES

Receivables, net of their related allowance, consist of the following:

(in 000s)
As of	December 31, 2022				June 30, 2022
	Short-term		Long-term		Short-term		Long-term
Loans to franchisees	$	16,304	$	26,587	$	6,194	$	22,036
Receivables for U.S. assisted and DIY tax preparation and related fees	10,427		2,182		18,893		2,560
H&R Block's Instant RefundSM receivables	1,193		103		3,491		198
H&R Block Emerald Advance® lines of credit	268,623		2,923		6,691		8,825
Software receivables from retailers	2,165		—		3,992		—
Royalties and other receivables from franchisees	6,380		—		3,682		73
Wave payment processing receivables	1,024		—		1,393		—
Other	22,500		1,528		14,111		1,172
Total	$	328,616	$	33,323	$	58,447	$	34,864

Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets in the consolidated balance sheets.

LOANS TO FRANCHISEES – Franchisee loan balances consist of term loans made primarily to finance the purchase of franchises and revolving lines of credit primarily for the purpose of funding working capital needs. As

of December 31, 2022 and June 30, 2022, loans with a principal balance more than 90 days past due, or on non-accrual status, are not material.

H&R BLOCK'S INSTANT REFUNDSM – H&R Block's Instant RefundSM amounts are generally received from the Canada Revenue Agency within 60 days of filing the client's return, with the remaining balance collectible from the client.

We review the credit quality of our Instant Refund receivables based on pools, which are segregated by the tax return year of origination, with older years being deemed more unlikely to be repaid. We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value. In December of each year, we charge-off the receivables to an amount we believe represents the net realizable value.

Balances and amounts on non-accrual status and classified as impaired, or more than 60 days past due, by tax return year of origination, as of December 31, 2022 are as follows:

			(in 000s)
Tax return year of origination	Current Balance		More Than 60 Days Past Due
2021	$	1,194	$	815
2020 and prior	102		102
	1,296		$	917
Allowance	—
Net balance	$	1,296

H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT – We review the credit quality of our purchased participation interests in Emerald AdvanceSM (EA) receivables based on pools, which are segregated by the fiscal year of origination, with older years being deemed more unlikely to be repaid. We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value. In December of each year, we charge-off the receivables to an amount we believe represents the net realizable value.

Balances and amounts on non-accrual status and classified as impaired, or more than 60 days past due, by fiscal year of origination, as of December 31, 2022 are as follows:

(in 000s)
Fiscal year of origination	Current Balance		Non-Accrual
2023	$	266,271	$	—
2022 and prior	8,278		8,278
Revolving loans	23,405		15,030
	297,954		$	23,308
Allowance	(26,408)
Net balance	$	271,546

ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for our EA and all other short-term and long-term receivables for the six months ended December 31, 2022 and 2021 is as follows:

(in 000s)
	EAs		All Other		Total
Balances as of July 1, 2022	$	26,141	$	51,126	$	77,267
Provision	15,081		1,500		16,581
Charge-offs, recoveries and other	(14,814)		(51,429)		(66,243)
Balances as of December 31, 2022	$	26,408	$	1,197	$	27,605
Balances as of July 1, 2021	$	27,704	$	60,272	$	87,976
Provision	12,429		2,210		14,639
Charge-offs, recoveries and other	(16,377)		(60,437)		(76,814)
Balances as of December 31, 2021	$	23,756	$	2,045	$	25,801