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Note 14 - Revenue From Contracts With Customers | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Revenue from Contract with Customer [Text Block] | NOTE 14 REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers relates to the Extended Warranty and Kingsway Search Xcelerator segments and includes: vehicle service agreement fees, GAP commissions, maintenance support service fees, warranty product commissions, homebuilder warranty service fees, homebuilder warranty commissions, business services consulting revenue, healthcare services revenue and software license and support revenue. Revenue is based on terms of various agreements with credit unions, consumers, businesses and homebuilders. Customers either pay in full at the inception of a warranty contract or commission product sale, or when consulting, healthcare and software license and support services are billed, or on terms subject to the Company’s customary credit reviews. The following table disaggregates revenues from contracts with customers by revenue type:
(in thousands) |  |  | Years ended December 31, |
|  |  | 2023 |  |  | 2022 |
Vehicle service agreement fees and GAP commissions | IWS, Geminus and PWI |  | $ | 60,022 |  |  | $ | 58,775 |
Maintenance support service fees | Trinity |  |  | 4,179 |  |  |  | 5,815 |
Warranty product commissions | Trinity |  |  | 4,029 |  |  |  | 4,564 |
Homebuilder warranty service fees | PWSC (a) |  |  | — |  |  |  | 4,348 |
Homebuilder warranty commissions | PWSC (a) |  |  | — |  |  |  | 540 |
Business services consulting fees | Ravix and Csuite |  |  | 19,403 |  |  |  | 16,836 |
Healthcare services | SNS and DDI |  |  | 14,848 |  |  |  | 2,402 |
Software license and support fees | SPI |  |  | 763 |  |  |  | — |
Service fee and commission revenue |  | $ | 103,244 |  |  | $ | 93,280 |
| (a) | Through the July 29, 2022 disposal
During the first quarter of 2022, IWS recorded a net charge of $0.9 million relating to a change in estimate in accounting for deferred revenue and deferred contract costs associated with vehicle service agreement fees, resulting in an increase to deferred service fees of $1.1 million and an increase in deferred contract costs of $0.2 million. Service fee receivables Receivables from contracts with customers are reported as service fee receivable, net in the consolidated balance sheets and at December 31, 2023 and December 31, 2022 were $10.1 million and $10.3 million, respectively. The decrease in receivables from contracts with customers is primarily due to the timing difference between the Company's satisfaction of performance obligations and customer payments. At December 31, 2021, service fee receivable, net was $6.7 million. The increase in receivables from contracts with customers from December 31, 2021 to December 31, 2022 is primarily due to receivables related to CSuite and SNS, which were acquired on November 1, 2022 and November 18, 2022, respectively, and the timing difference between the Company's satisfaction of performance obligations and customer payments; partially offset by a decrease due to the disposal of PWSC on July 29, 2022. Service fee receivable is reported net of an estimated allowance for credit losses. During the year ended December 31, 2023, the Company recorded an increase to its allowance for credit losses of $0.1 million. Service fee receivables that are deemed to be uncollectible are written off against the allowance for credit losses when identified. There was no material write-off of service fee receivable that was deemed to be uncollectible during the the year ended December 31, 2023. Contract asset The Company records a contract asset, which is included in other assets in the consolidated balance sheets, when revenue is recognized prior to billing the customer. Upon billing, which typically occurs over a three to five year installment period, the value of the contract asset is reversed and service fee receivable is recorded. The Company did not have a contract asset prior to December 31, 2022. The contract asset was $1.7 million and zero at December 31, 2023 and December 31, 2022, respectively. The increase in the contract asset during the year ended December 31, 2023 is primarily due to the contract asset acquired related to the acquisition of SPI of $1.8 million which was recorded at a provisional amount subject to finalization of the Company’s purchase price allocation, as further discussed in Note 4, "Acquisitions". During the year ended December 31, 2023, the contract asset was reduced by $0.1 million as a result of billings to customers. No impairment losses related to contract assets were recorded during 2023. Deferred service fees The Company records deferred service fees resulting from contracts with customers when payment is received in advance of satisfying the performance obligations. Changes in deferred service fees for the years ended December 31, 2023 and December 31, 2022 were as follows:
(in thousands) |  | Years ended December 31, |
Balance, December 31, 2021 |  | $ | 89,217 |
Deferral of revenue |  |  | 61,058 |
Recognition of deferred service fees |  |  | (59,966 | )
Deferred service fees disposed of related to PWSC |  |  | (7,596 | )
Balance, December 31, 2022 |  |  | 82,713 |
Deferred service fees acquired related to SPI |  |  | 423 |
Deferral of revenue |  |  | 56,712 |
Recognition of deferred service fees |  |  | (55,853 | )
Balance, December 31, 2023 |  | $ | 83,995 |
The increase in deferred service fees during the year ended December 31, 2023 is primarily due to additions to deferred service fees in excess of deferred service fees recognized during the year ended December 31, 2023. The decrease in deferred service fees during the year ended December 31, 2022 is primarily due to the disposal of PWSC on July 29, 2022, partially offset by additions to deferred service fees in excess of deferred service fees recognized during the year ended December 31, 2022 as cash sales have begun to increase. Approximately $44.6 million and $43.2 million of service fee and commission revenue recognized during the years ended December 31, 2023 and December 31, 2022 was included in deferred service fees as of December 31, 2022 and December 31, 2021, respectively. Remaining performance obligations The Company expects to recognize within one year as service fee and commission revenue approximately 51.0% of the outstanding performance obligations of December 31, 2023. The balance relates primarily to vehicle service agreement fees. Deferred contract costs Deferred contract costs represent the deferral of incremental costs to obtain or fulfill a contract with a customer. The deferred contract costs balances and related amortization expense for the years ended December 31, 2023 and December 31, 2022 are comprised as follows:
(in thousands) |  | Years ended December 31, 2023 |  |  | Years ended December 31, 2022 |
|  | Costs to Obtain a Contract |  |  | Costs to Fulfill a Contract |  |  | Total |  |  | Costs to Obtain a Contract |  |  | Costs to Fulfill a Contract |  |  | Total |
Balance at January 1, net |  | $ | 13,174 |  |  | $ | 83 |  |  | $ | 13,257 |  |  | $ | 10,850 |  |  | $ | 80 |  |  | $ | 10,930 |
Additions |  |  | 9,381 |  |  |  | 24 |  |  |  | 9,405 |  |  |  | 9,273 |  |  |  | 21 |  |  |  | 9,294 |
Amortization |  |  | (8,902 | ) |  |  | (26 | ) |  |  | (8,928 | ) |  |  | (6,949 | ) |  |  | (18 | ) |  |  | (6,967 | )
Balance at December 31, net |  | $ | 13,653 |  |  | $ | 81 |  |  | $ | 13,734 |  |  | $ | 13,174 |  |  | $ | 83 |  |  | $ | 13,257 |
No impairment losses related to deferred contract costs were recorded in 2023 or 2022.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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