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FINANCE RECEIVABLES | 6 Months Ended
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Dec. 31, 2021
Receivables [Abstract] |
FINANCE RECEIVABLES | FINANCE RECEIVABLES The Company's finance receivables consist of financed devices under the QuickStart program and devices contractually associated with the Seed platform. Predominately all of the Company’s finance receivables agreements are classified as non-cancellable sixty-month sales-type leases. As of December 31, 2021 and June 30, 2021, finance receivables consist of the following:
($ in thousands) |  | December 31, 2021 |  | June 30, 2021
Current finance receivables, net |  | $ | 8,247 |  |  | $ | 7,967 |
Finance receivables due after one year, net |  | 10,906 |  |  | 11,632 |
Total finance receivables, net of allowance of $1,062 and $1,109, respectively |  | $ | 19,153 |  |  | $ | 19,599 |
We collect lease payments from customers primarily as part of the flow of funds from our transaction processing service. Balances are considered past due if customers do not have sufficient transaction revenue to cover the monthly lease payment by the end of the monthly billing period. The Company routinely monitors customer payment performance and uses prior payment performance as a measure to assess the capability of the customer to repay contractual obligations of the lease agreements as scheduled. On an as-needed basis, qualitative information may be taken into consideration if new information arises related to the customer’s ability to repay the lease. Credit risk for these receivables is continuously monitored by management and reflected within the allowance for finance receivables by aggregating leases with similar risk characteristics into pools that are collectively assessed. Because the Company’s lease contracts generally have similar terms, customer characteristics around transaction processing volume and sales were used to disaggregate the leases. Our key credit quality indicator is the amount of transaction revenue we process for each customer relative to their lease payment due, as we consider this customer characteristic to be the strongest predictor of the risk of customer default. Customers with low processing volume or with transaction sales that are insufficient to cover the lease payment are considered to be at a higher risk of customer default. Customers are pooled based on their ratio of gross sales to required monthly lease obligations. We categorize outstanding receivables into two categories: high ratio customers (customers who have adequate transaction processing volumes sufficient to cover monthly fees) and low ratio customers (customers that do not consistently have adequate transaction processing volumes sufficient to cover monthly fees). Using these two categories, we performed an analysis of historical write-offs to calculate reserve percentages by aging buckets for each category of customer. At December 31, 2021, the gross lease receivable by current payment performance on a contractual basis and year of origination consisted of the following:
|  | Leases by Origination
($ in thousands) |  | Up to 1 Year Ago |  | Between 1 and 2 Years Ago |  | Between 2 and 3 Years Ago |  | Between 3 and 4 Years Ago |  | Between 4 and 5 Years Ago |  | More than 5 Years Ago |  | Total
Current |  | $ | 6,587 |  |  | $ | 3,417 |  |  | $ | 4,570 |  |  | $ | 2,555 |  |  | $ | 1,319 |  |  | $ | 17 |  |  | $ | 18,465 |
30 days and under |  | 5 |  |  | 13 |  |  | 47 |  |  | 45 |  |  | 5 |  |  | — |  |  | 115 |
31-60 days |  | 20 |  |  | 32 |  |  | 74 |  |  | 51 |  |  | 20 |  |  | — |  |  | 197 |
61-90 days |  | 12 |  |  | 25 |  |  | 64 |  |  | 44 |  |  | 18 |  |  | 1 |  |  | 164 |
Greater than 90 days |  | 26 |  |  | 121 |  |  | 484 |  |  | 492 |  |  | 87 |  |  | 64 |  |  | 1,274 |
Total finance receivables |  | $ | 6,650 |  |  | $ | 3,608 |  |  | $ | 5,239 |  |  | $ | 3,187 |  |  | $ | 1,449 |  |  | $ | 82 |  |  | $ | 20,215 |
At June 30, 2021, the gross lease receivable by current payment performance on a contractual basis and year of origination consisted of the following:
|  | Leases by Origination
($ in thousands) |  | Up to 1 Year Ago |  | Between 1 and 2 Years Ago |  | Between 2 and 3 Years Ago |  | Between 3 and 4 Years Ago |  | Between 4 and 5 Years Ago |  | More than 5 Years Ago |  | Total
Current |  | $ | 6,736 |  |  | $ | 3,970 |  |  | $ | 3,942 |  |  | $ | 3,081 |  |  | $ | 1,358 |  |  | $ | 31 |  |  | $ | 19,118 |
30 days and under |  | 19 |  |  | 67 |  |  | 90 |  |  | 93 |  |  | 11 |  |  | 1 |  |  | 281 |
31-60 days |  | 4 |  |  | 9 |  |  | 22 |  |  | 2 |  |  | 1 |  |  | — |  |  | 38 |
61-90 days |  | 10 |  |  | 42 |  |  | 66 |  |  | 54 |  |  | 10 |  |  | — |  |  | 182 |
Greater than 90 days |  | 46 |  |  | 69 |  |  | 490 |  |  | 419 |  |  | 54 |  |  | 11 |  |  | 1,089 |
Total finance receivables |  | $ | 6,815 |  |  | $ | 4,157 |  |  | $ | 4,610 |  |  | $ | 3,649 |  |  | $ | 1,434 |  |  | $ | 43 |  |  | $ | 20,708 |
At December 31, 2021, credit quality indicators by year of origination consisted of the following:
|  | Leases by Origination
($ in thousands) |  | Up to 1 Year Ago |  | Between 1 and 2 Years Ago |  | Between 2 and 3 Years Ago |  | Between 3 and 4 Years Ago |  | Between 4 and 5 Years Ago |  | More than 5 Years Ago |  | Total
High ratio customers |  | $ | 6,334 |  |  | $ | 3,194 |  |  | $ | 4,462 |  |  | $ | 2,273 |  |  | $ | 1,209 |  |  | $ | 11 |  |  | $ | 17,483 |
Low ratio customers |  | 316 |  |  | 414 |  |  | 777 |  |  | 914 |  |  | 240 |  |  | 71 |  |  | 2,732 |
Total finance receivables |  | $ | 6,650 |  |  | $ | 3,608 |  |  | $ | 5,239 |  |  | $ | 3,187 |  |  | $ | 1,449 |  |  | $ | 82 |  |  | $ | 20,215 |
At June 30, 2021, credit quality indicators by year of origination consisted of the following:
|  | Leases by Origination
($ in thousands) |  | Up to 1 Year Ago |  | Between 1 and 2 Years Ago |  | Between 2 and 3 Years Ago |  | Between 3 and 4 Years Ago |  | Between 4 and 5 Years Ago |  | More than 5 Years Ago |  | Total
High ratio customers |  | $ | 6,415 |  |  | $ | 3,824 |  |  | $ | 3,793 |  |  | $ | 2,920 |  |  | $ | 1,290 |  |  | $ | 24 |  |  | $ | 18,266 |
Low ratio customers |  | 400 |  |  | 333 |  |  | 817 |  |  | 729 |  |  | 144 |  |  | 19 |  |  | 2,442 |
Total finance receivables |  | $ | 6,815 |  |  | $ | 4,157 |  |  | $ | 4,610 |  |  | $ | 3,649 |  |  | $ | 1,434 |  |  | $ | 43 |  |  | $ | 20,708 |
The following table represents a rollforward of the allowance for finance receivables for the six months ending December 31, 2021 and 2020:
|  | Six months ended December 31, |  | Six months ended December 31,
($ in thousands) |  | 2021 |  | 2020
Balance at June 30 |  | $ | 1,109 |  |  | $ | 150 |
Impact of adoption of ASC 326* |  | — |  |  | 409 |
Provision for expected losses |  | 100 |  |  | — |
Balance at September 30 |  | $ | 1,209 |  |  | $ | 559 |
Provision for expected losses |  | 100 |  |  | 350 |
Write-offs |  | (247) |  |  | — |
Balance at December 31 |  | $ | 1,062 |  |  | $ | 909 |
* * The Company adopted Financial Instruments - Credit Losses (Topic 326) on July 1, 2020. Cash to be collected on our performing finance receivables due for each of the fiscal years are as follows:
($ in thousands) |
2022 | $ | 8,020 |
2023 | 6,241 |
2024 | 4,625 |
2025 | 3,110 |
2026 | 1,726 |
Thereafter | 313 |
Total amounts to be collected | 24,035 |
Less: interest | (3,820) |
Less: allowance for receivables | (1,062) |
Total finance receivables | $ | 19,153 |

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- Definition The entire disclosure for financing receivable. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2196816 + Details
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