Accounts Receivable |
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Accounts Receivable | Loan Receivables Held for Sale The following table summarizes the activity in the balance of loan receivables held for sale, net at lower of cost or fair value during the periods indicated.
(1)Includes purchases of $839.1 million and $430.7 million participations in loans through the Warehouse SPV for the six months ended June 30, 2021 and 2020, respectively. (2)We retain servicing arrangements on sold loan receivables with comparable terms and conditions as loans that are not participated by our Bank Partners. Amounts also include accrued interest and fees and recoveries of previously charged-off loan receivables held for sale. Income from loan receivables held for sale activities is recorded within interest and other revenue in the Unaudited Condensed Consolidated Statements of Operations. (3)Recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. (4)During the six months ended June 30, 2021, the valuation allowance increased by $3.8 million, due to the change in the lower of cost or fair value adjustment on our Warehouse Loan Participations, partially offset by a decrease in our provision for credit losses of $1.7 million. During the six months ended June 30, 2020, the valuation allowance increased by $10.1 million, due to the change in the lower of cost or fair value adjustment on our Warehouse Loan Participations and an increase in our provision for credit losses of $1.1 million. (5)We temporarily hold certain loan receivables, which are originated by a Bank Partner, while non-originating Bank Partner eligibility is being determined. Once we determine that a loan receivable meets the investment requirements of an eligible Bank Partner, we transfer the loan receivable to the Bank Partner at cost plus any accrued interest. The reported amount also includes loan receivables that have been placed on non-accrual and non-payment status while we investigate consumer inquiries. (6)We received recovery payments of $214 thousand and $159 thousand during the six months ended June 30, 2021 and 2020, respectively. Recoveries of principal and finance charges and fees on previously written off loan receivables held for sale are recognized on a collected basis and the cash proceeds received are recorded within sales, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations.Accounts ReceivableAs of June 30, 2021, our allowance for losses on accounts receivable was measured under ASC 326. Historically, the majority of our pools of accounts receivable did not have write-offs. For the pool of accounts receivable for which we had historical write-offs, we used an aging method and the average 12-month historical loss rate as a basis for estimating credit losses on the current accounts receivable balance. In the absence of relevant historical loss experience for the other pools of accounts receivables, we also used this average 12-month loss rate to inform our estimate of credit losses on those balances. Given (i) our methods of collecting funds on merchant and servicing receivables, (ii) we have not observed meaningful changes in our counterparties' abilities to pay, and (iii) we establish an allowance for all delinquent accounts receivable (typically deemed to be 31 days or more past due), providing for a maximum 30-day term of our accounts receivable balances, we determined that our historical loss rates remain most indicative of our lifetime expected losses. Accounts receivable consisted of the following as of the dates indicated.
The following table summarizes the activity in the balance of allowance for uncollectible amounts during the period from January 1, 2021 through June 30, 2021.
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