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Allowance for Expected Credit Losses | 3 Months Ended
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Mar. 31, 2021
Credit Loss [Abstract] |
Allowance for Expected Credit Losses | Allowance for Expected Credit Losses As previously disclosed, on January 1, 2020 we adopted ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments" ("CECL") on a prospective basis to determine our allowance for credit losses. As a result of the adoption of the ASU, we recorded a noncash cumulative effect after-tax adjustment to retained earnings of $7.3 million on our January 1, 2020 opening condensed consolidated balance sheet. The allowance for credit losses is an estimate of the credit losses expected over the life of our financial assets and instruments. We assess and measure expected credit losses on a collective basis when similar risk characteristics exist, including market, geography, credit risk and remaining duration. Financial assets and instruments that do not share risk characteristics are evaluated on an individual basis. Our estimate of the allowance balance is assessed and quantified using internal and external valuation information relating to past events, current conditions and reasonable and supportable forecasts over the contractual terms of an asset. Our primary exposure to expected credit losses is through our trade receivables and contract assets. For these financial assets, we record an allowance for expected credit losses that, when deducted from the gross asset balance, presents the net amount expected to be collected. Primarily, our experience of historical credit losses provides the basis for our estimation of the allowance. We estimate the allowance based on an aging schedule and according to historical losses as determined from our history of billings and collections. Additionally, we adjust the allowance for factors that are specific to our customers’ credit risk such as financial difficulties, liquidity issues, insolvency, and country and geopolitical risks. We also consider both the current and forecasted macroeconomic conditions as of the reporting date. As identified and needed, we adjust the allowance and recognize adjustments in the income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to be uncollectible. Subsequent recoveries of previously written off amounts are reflected as a reduction to credit impairment losses in the condensed consolidated statements of income. Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Generally, contract assets are recorded when contractual billing schedules differ from revenue recognition based on timing and are managed through the revenue recognition process. The current expected credit loss for contract assets is estimated to be approximately 1% of the asset balance. The following table presents the changes in the allowance for expected credit losses for our trade receivables and contract assets for the three months ended March 31, 2021 and 2020:
(Amounts in thousands) | Trade receivables |  | Contract assets
Beginning balance, January 1, 2021 | $ | 75,176 |  |  | $ | 3,205 |
Charges to cost and expenses, net of recoveries | (79) |  |  | — |
Currency effects and other, net | (1,268) |  |  | (66) |
Ending balance, March 31, 2021 | $ | 73,829 |  |  | $ | 3,139 |
Beginning balance, January 1, 2020 | $ | 53,412 |  |  | $ | 206 |
Adoption of ASU 2016-13 | 7,291 |  |  | 2,403 |
Charges to cost and expenses, net of recoveries | 4,058 |  |  | — |
Currency effects and other, net | 1,491 |  |  | 72 |
Ending balance, March 31, 2020 | $ | 66,252 |  |  | $ | 2,681 |
Our allowance on long-term receivables, included in other assets, net, represent receivables with collection periods longer than 12 months and the balance primarily consists of reserved receivables associated with the national oil company in Venezuela. The following table presents the changes in the allowance for long-term receivables for the three months ended March 31, 2021 and 2020:
(Amounts in thousands) | 2021 |  | 2020 |  |
Balance at January 1 | $ | 67,842 |  |  | $ | 68,555 |  |  |
Adoption of ASU 2016-13 | — |  |  | (552) |  |  |
Currency effects and other, net | (1,059) |  |  | (574) |  |  |
Balance at March 31 | $ | 66,783 |  |  | $ | 67,429 |  |  |
We also have exposure to credit losses from off-balance sheet exposures, such as financial guarantees and standby letters of credit, where we believe the risk of loss is immaterial to our financial statements as of March 31, 2021.

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- Definition The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=121582814&loc=SL82922895-210455 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121599337&loc=SL82919272-210447 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=121599337&loc=SL82919236-210447 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 20 -URI http://asc.fasb.org/extlink&oid=121599337&loc=SL82919269-210447 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=121582814&loc=SL82922888-210455 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=121599337&loc=SL82919244-210447 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=121599337&loc=SL82919230-210447 + Details
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