RECEIVABLES

6 Months Ended

Dec. 31, 2023

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, 2023				June 30, 2023
	Short-term		Long-term		Short-term		Long-term
Loans to franchisees	$	19,743	$	20,303	$	6,344	$	19,206
Receivables for U.S. assisted and DIY tax preparation and related fees	6,901		6,925		11,061		6,824
H&R Block's Instant Refund® receivables	3,460		305		8,499		414
Emerald AdvanceSM	347,025		9,410		10,834		7,089
Software receivables from retailers	2,669		—		1,650		—
Royalties and other receivables from franchisees	5,553		—		3,416		—
Wave payment processing receivables	1,758		—		964		—
Other	10,344		1,631		17,219		1,108
Total	$	397,453	$	38,574	$	59,987	$	34,641

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, 2023 and June 30, 2023, loans with a principal balance more than 90 days past due, or on non-accrual status, are not material.

H&R BLOCK'S INSTANT REFUND® – H&R Block's Instant Refund® 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 and the related allowance to an amount we believe represents the net realizable value.

Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by tax return year of origination, as of December 31, 2023 are as follows:

			(in 000s)
Tax return year of origination	Balance		More Than 60 Days Past Due
2022	$	3,593	$	3,471
2021 and prior	172		172
	3,765		$	3,643
Allowance	—
Net balance	$	3,765

EMERALD ADVANCESM – Historically, Emerald AdvanceSM lines of credit (EA LOCs) have been offered to clients in our offices from mid-November through mid-January. If the borrower met certain criteria as agreed in the loan terms, the line of credit could be utilized year-round (Revolving Loan). In fiscal year 2024, EAs are being offered as term loans (EA TLs), and we discontinued EA LOCs, including the Revolving Loans. See note 8 for discussion of the new EA TL.

We review the credit quality of our purchased participation interests in 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. Typically, in December of each year, we charge-off the receivables and the related allowance for EA LOCs, excluding Revolving Loans, to an amount we believe represents the net realizable value. However, due to the discontinuation of EA LOCs, we charged-off the receivables and the related allowance of EA LOCs and Revolving Loans during the quarter ended September 30, 2023 to an amount that we believe represents net realizable value.

Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by fiscal year of origination, as of December 31, 2023 are as follows:

(in 000s)
Fiscal year of origination	Balance		Non-Accrual
2024 – Term loans	$	358,084	$	—
2023 and prior – Lines of credit and Revolving Loans	15,908		15,908
	373,992		$	15,908
Allowance	(17,557)
Net balance	$	356,435

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, 2023 and 2022 is as follows:

(in 000s)
	EAs		All Other		Total
Balances as of July 1, 2023	$	27,386	$	35,108	$	62,494
Provision for credit losses	17,885		3,651		21,536
Charge-offs, recoveries and other	(27,714)		(37,613)		(65,327)
Balances as of December 31, 2023	$	17,557	$	1,146	$	18,703
Balances as of July 1, 2022	$	26,141	$	51,126	$	77,267
Provision for credit losses	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