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Receivables and Allowance for Doubtful Accounts (Notes) | 9 Months Ended
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Sep. 30, 2022
Receivables and Allowance for Doubtful Accounts [Abstract] |
Receivables and Allowance for Doubtful Accounts | Receivables and Allowance for Doubtful Accounts Installment sales receivables consist primarily of receivables due from customers for the sale of merchandise in our retail installment stores. Installment sales receivables associated with the sale of merchandise at our Get It Now and Home Choice stores generally consist of the sales price of the merchandise purchased and any additional fees for services the customer has chosen, less the customer’s down payment. No interest is accrued and interest income is recognized each time a customer makes a payment, generally on a monthly basis. Interest paid on installment agreements for both the nine months ended September 30, 2022 and 2021 was $9.2 million. Trade and notes receivables consist of amounts due from our lease-to-own customers for renewal and uncollected rental payments, adjusted for the probability of collection based on our assessment of historical collection rates; amounts owed from our franchisees for inventory purchases, earned royalties and other obligations; and other corporate related receivables. Credit is extended to franchisees based on an evaluation of each franchisee’s financial condition and collateral is generally not required. Trade receivables are generally due within 30 days. Receivables consist of the following:
(in thousands) | September 30, 2022 |  | December 31, 2021
Installment sales receivables | $ | 67,398 |  |  | $ | 66,276 |
Trade and notes receivables | 58,210 |  |  | 68,581 |
Total receivables | 125,608 |  |  | 134,857 |
Less allowance for doubtful accounts(1) | (12,378) |  |  | (8,479) |
Total receivables, net of allowance for doubtful accounts | $ | 113,230 |  |  | $ | 126,378 |
1) Lease receivables are accrued on a net basis, adjusted for the probability of collection based on our assessment of historical collection rates, as described above. Therefore, we do not maintain a separate allowance for doubtful accounts related to our lease receivables. We have established an allowance for doubtful accounts for our installment notes receivable. Our policy for determining the allowance is primarily based on historical loss experience, as well as the results of management’s review and analysis of the payment and collection of the installment notes receivable within the previous year. We believe our allowance is adequate to absorb all expected losses. Our policy is to charge off installment notes receivable that are 120 days or more past due. Charge-offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previously charged off balances are applied as an increase to the allowance for doubtful accounts. The allowance for our Franchising trade and notes receivables is determined by considering a number of factors, including the length of time receivables are past due, previous loss history, the franchisee’s current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Trade receivables that are more than 90 days past due are either written-off or fully reserved in our allowance for doubtful accounts. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The allowance for doubtful accounts related to Franchising trade and notes receivables was $1.0 million and $0.9 million, and the allowance for doubtful accounts related to installment sales receivables was $11.4 million and $7.6 million at September 30, 2022 and December 31, 2021, respectively. Changes in our allowance for doubtful accounts are as follows:
(in thousands) | September 30, 2022 |  |  |  |
Beginning allowance for doubtful accounts | $ | 8,479 |  |  |  |  |
Bad debt expense(1) | 18,100 |  |  |  |  |
Accounts written off, net of recoveries | (14,201) |  |  |  |  |
Ending allowance for doubtful accounts | $ | 12,378 |  |  |  |  |
(1) Uncollectible installment payments, franchisee obligations, and other corporate receivables are recognized in other store operating expenses in our condensed consolidated financial statements.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI https://asc.fasb.org/subtopic&trid=2196772 + Details
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