Accounts Receivable and Contract Assets, Net

9 Months Ended

Sep. 30, 2020

Accounts Receivable and Contract Assets, Net

(3) Accounts Receivable and Contract Assets, Net

On January 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective approach. See Note 2. The cumulative effect of initially applying ASU 2016-13 had an immaterial impact on the Company’s opening balance of accumulated deficit.

Accounts receivable, net is as follows (in thousands):

	As of			As of
	September 30, 2020			December 31, 2019
Accounts receivable amortized cost	$	83,524		$	69,767
Allowance for credit losses		(2,597	)		(1,125	)
Net accounts receivable	$	80,927		$	68,642

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Balance, beginning of period	$	(2,257	)	$	(1,051	)	$	(1,125	)	$	(711	)
Provision for expected credit losses		(372	)		(253	)		(1,700	)		(642	)
Write-offs		32			148			228			197
Balance, end of period	$	(2,597	)	$	(1,156	)	$	(2,597	)	$	(1,156	)

Contract assets, net is as follows (in thousands):

	As of			As of
	September 30, 2020			December 31, 2019
Contract asset amortized cost	$	3,514		$	1,959
Allowance for credit losses		(20	)		—
Net contract asset	$	3,494		$	1,959

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

	Three Months Ended September 30, 2020			Nine Months Ended September 30, 2020
Balance, beginning of period	$	(28	)	$	—
Recovery (provision) for expected credit losses		8			(20	)
Write-offs		—			—
Balance, end of period	$	(20	)	$	(20	)

Credit loss expense was $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively. Credit loss expense was $1.3 million and $0.6 million for the nine months ended September 30, 2020 and 2019, respectively.

The following table summarizes the changes in the sales reserve (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Balance, beginning of period	$	(375	)	$	(195	)	$	(175	)	$	(200	)
Reductions		225			—			25			—
Write-offs		—			4			—			9
Balance, end of period	$	(150	)	$	(191	)	$	(150	)	$	(191	)