Deposits with and receivables from broker-dealers, clearing organizations, and counterparties, net, receivables from clients, net, and notes receivable, net include an allowance for doubtful accounts, which reflects the Company’s best estimate of probable losses inherent in the accounts. The Company provides for an allowance for doubtful accounts based on a specific-identification basis. The Company continually reviews its allowance for doubtful accounts. The allowance for doubtful accounts related to deposits with and receivables from broker-dealers, clearing organizations, and counterparties was $36.9 million and $48.0 million as of September 30, 2019 and 2018, respectively. The allowance for doubtful accounts related to receivables from clients was $11.7 million and $10.2 million as of September 30, 2019 and 2018, respectively. The Company had no allowance for doubtful accounts related to notes receivable as of September 30, 2019 and 2018.

During the year ended September 30, 2019, the Company recorded bad debt expense, net of recoveries, of $2.5 million, including a net increase in provisions for bad debt of $2.6 million, direct write-offs of $0.3 million, and direct recoveries of $0.4 million. The net increase in provision for bad debts during fiscal 2019 primarily related to $2.7 million of OTC client account deficits in the Commercial Hedging segment, and $1.4 million in the Clearing & Execution Services segment, partially offset by a client recovery across the Commercial Hedging segment and the Physical Commodities segment. Additionally, during the year ended September 30, 2019, the Company recorded recoveries on the bad debt on physical coal of $12.4 million, reducing the allowance for doubtful accounts related to deposits with and receivables from broker-dealers, clearing organizations, and counterparties. See additional information in Note 18.

During the year ended September 30, 2018, the Company recorded bad debt expense, net of recoveries, of $3.1 million, including a net increase in provision for bad debts of $2.9 million, direct write-offs of $0.3 million, and recoveries of $0.1 million. The increase in provision for bad debts during fiscal 2018 primarily related to $2.8 million of agricultural OTC client account deficits in the Commercial Hedging segment and $0.4 million of exchange-traded client account deficits in the Clearing & Execution Services segment, partially offset by a provision decrease in the Physical Commodities segment. Additionally, during the year ended September 30, 2018, the Company recorded charges to earnings of $1.0 million, to record an additional allowance for doubtful accounts related to a bad debt incurred in the physical coal business, see Note 18.

During the year ended September 30, 2017, the Company recorded bad debt expense, net of recoveries, of $4.3 million, including provision increases of $4.2 million and direct write-offs of $0.1 million. The increase in bad debts during fiscal 2017 primarily related to $3.8 million of client deficits in the Commercial Hedging segment, primarily related to account deficits from South Korean and Dubai commercial LME clients, $0.2 million of uncollectible client receivables in the Physical Commodities segment, and $0.3 million of uncollectible client receivables in the Clearing & Execution Services segment. Additionally, during the year ended September 30, 2017, the Company recorded charges to earnings of $47.0 million to record an allowance for doubtful accounts related to a bad debt incurred in the physical coal business conducted solely in INTL Asia Pte. Ltd., with a coal supplier (counterparty), as further discussed in Note 18.

Activity in the allowance for doubtful accounts for the fiscal years ended September 30, 2019, 2018, and 2017 was as follows:



(in millions)	2019			2018			2017
Balance, beginning of year	$	58.2		$	54.6		$	9.7
(Recovery) provision for bad debts	(9.8		)	3.9			51.0
Allowance charge-offs	(1.3		)	(0.3		)	(6.1		)
Other⁽¹⁾	1.5			—			—
Balance, end of year	$	48.6		$	58.2		$	54.6
⁽¹⁾ Allowance increase is related to a recoverable amount due from an affiliated party and recorded in ‘other assets’ on the consolidated balance sheets.