Financing Receivables

Laureate’s financing receivables consist primarily of trade receivables related to student tuition financing programs with an initial term in excess of one year. We have offered long-term financing through the execution of note receivable agreements with students at some of our institutions. Our disclosures include financing receivables that are classified in our Consolidated Balance Sheets as both current and long-term, reported in accordance with ASC 310, “Receivables.”

Laureate’s financing receivables balances were as follows:



	September 30, 2018			December 31, 2017
Financing receivables	$	31,506		$	20,380
Allowance for doubtful accounts	(5,876		)	(6,472		)
Financing receivables, net of allowances	$	25,630		$	13,908

We do not purchase financing receivables in the ordinary course of our business. We may sell certain receivables that are significantly past due. No material amounts of financing receivables were sold during the periods reported herein.

Delinquency is the primary indicator of credit quality for our financing receivables. Receivable balances are considered delinquent when contractual payments on the loan become past due. Delinquent financing receivables are placed on non-accrual status for interest income. The accrual of interest is resumed when the financing receivable becomes contractually current and when collection of all remaining amounts due is reasonably assured. We record an Allowance for doubtful accounts to reduce our financing receivables to their net realizable value. The Allowance for doubtful accounts is based on the age of the receivables, the status of past-due amounts, historical collection trends, current economic conditions, and student enrollment status. Each of our institutions evaluates its balances for potential impairment. We consider impaired loans to be those that are past due one year or greater, and those that are modified as a troubled debt restructuring (TDR). The aging of financing receivables grouped by country portfolio was as follows:



	Chile		Other		Total
As of September 30, 2018
Amounts past due less than one year	$	11,327	$	305	$	11,632
Amounts past due one year or greater	3,484		192		3,676
Total past due (on non-accrual status)	14,811		497		15,308
Not past due	15,333		865		16,198
Total financing receivables	$	30,144	$	1,362	$	31,506

As of December 31, 2017
Amounts past due less than one year	$	6,800	$	921	$	7,721
Amounts past due one year or greater	3,551		201		3,752
Total past due (on non-accrual status)	10,351		1,122		11,473
Not past due	8,494		413		8,907
Total financing receivables	$	18,845	$	1,535	$	20,380

The following is a rollforward of the Allowance for doubtful accounts related to financing receivables for the nine months ended September 30, 2018 and 2017, grouped by country portfolio:



	Chile			Other			Total
Balance at December 31, 2017	$	(6,107	)	$	(365	)	$	(6,472	)
Charge-offs	1,338			37			1,375
Recoveries	—			—			—
Reclassifications	—			—			—
Provision	(1,233		)	18			(1,215		)
Currency adjustments	434			2			436
Balance at September 30, 2018	$	(5,568	)	$	(308	)	$	(5,876	)

Balance at December 31, 2016	$	(6,209	)	$	(877	)	$	(7,086	)
Charge-offs	2,798			330			3,128
Recoveries	—			—			—
Reclassifications	—			—			—
Provision	(2,089		)	225			(1,864		)
Currency adjustments	(360		)	(47		)	(407		)
Balance at September 30, 2017	$	(5,860	)	$	(369	)	$	(6,229	)

Restructured Receivables

A TDR is a financing receivable in which the borrower is experiencing financial difficulty and Laureate has granted an economic concession to the student debtor that we would not otherwise consider. When we modify financing receivables in a TDR, Laureate typically offers the student debtor an extension of the loan maturity and/or a reduction in the accrued interest balance. In certain situations, we may offer to restructure a financing receivable in a manner that ultimately results in the forgiveness of contractually specified principal balances. Our only TDRs are in Chile.

The number of financing receivable accounts and the pre- and post-modification account balances modified under the terms of a TDR during the nine months ended September 30, 2018 and 2017 were as follows:



	Number of Financing Receivable Accounts	Pre-Modification Balance Outstanding		Post-Modification Balance Outstanding
2018	435	$	1,345	$	1,262
2017	355	$	1,838	$	1,655

The preceding table represents accounts modified under the terms of a TDR during the nine months ended September 30, 2018, whereas the following table represents accounts modified as a TDR between January 1, 2017 and September 30, 2018 that subsequently defaulted during the nine months ended September 30, 2018:

The following table represents accounts modified as a TDR between January 1, 2016 and September 30, 2017 that subsequently defaulted during the nine months ended September 30, 2017:

Number of Financing Receivable Accounts

Balance at Default