PRENEED CEMETERY RECEIVABLES

Preneed sales of cemetery interment rights and related products and services are usually financed through interest-bearing installment sales contracts, generally with terms of up to five years, with such interest income reflected as Preneed cemetery finance charges. In substantially all cases, we receive an initial down payment at the time the contract is signed.

Our cemetery financed receivables at December 31, 2017 and March 31, 2018 are as follows (in thousands):



	December 31, 2017		March 31, 2018
Accounts receivable, including unearned finance charges and allowance for contract cancellations of $2,779 and $2,745, respectively	$	11,843	$	12,285	⁽¹⁾
Preneed receivables, including unearned finance charges and allowance for contract cancellations of $4,922 and $4,903, respectively	28,631		28,979		⁽²⁾
Preneed cemetery financed receivables	$	40,474	$	41,264




(1)	In accordance with Topic 606, $1.4 million of cemetery accounts receivable has been reclassified to reduce deferred preneed cemetery revenue at March 31, 2018.
(2)	In accordance with Topic 606, $3.1 million of preneed cemetery receivables has been reclassified to reduce deferred preneed cemetery revenue at March 31, 2018.

The unearned finance charges associated with these receivables were $5.7 million at both December 31, 2017 and March 31, 2018.

We determine an allowance for customer cancellations and refunds on contracts in which revenue has been recognized on sales of cemetery interment rights. We have a collections policy where past due notifications are sent to the customer beginning at 15 days past due and periodically thereafter until the contract is cancelled or payment is received. We reserve 100% of the receivables on contracts in which the revenue has been recognized and payments are 90 days past due or more, which was approximately 4.7% of the total receivables on recognized sales at March 31, 2018. An allowance is recorded at the date that the contract is executed and periodically adjusted thereafter based upon actual collection experience at the business level.

For the three months ended March 31, 2018, the change in the allowance for contract cancellations was as follows (in thousands):



	March 31, 2018
Beginning balance	$	2,019
Write-offs and cancellations	(307		)
Provision	309
Ending balance	$	2,021

The aging of preneed cemetery financed receivables as of March 31, 2018 was as follows (in thousands):



	31-60 Past Due		61-90 Past Due		91-120 Past Due		>120 Past Due		Total Past Due		Current		Total Financing Receivables
Recognized revenue	$	892	$	475	$	154	$	1,286	$	2,807	$	27,661	$	30,468
Deferred revenue	288		153		50		368		860		9,936		10,796
Total contracts	$	1,180	$	628	$	204	$	1,654	$	3,667	$	37,597	$	41,264