Receivables

12 Months Ended

Dec. 31, 2021

The Company adopted ASU 2016-13 as of January 1, 2020, using a modified retrospective transition approach and has recorded a cumulative-effect transition adjustment to accumulated deficit as of January 1, 2020. The transition adjustment of $6.3 million to accumulated deficit included an $8.4 million increase in the allowance for credit losses, partially offset by a $2.1 million increase in deferred tax benefit. The transition had no impact to the consolidated statement of operations.

Prior to granting credit, the Company evaluates each client in an underwriting process, taking into consideration the prospective client’s financial condition, past payment experience, credit bureau information and other financial and qualitative factors that may affect the client’s ability to pay. Specific credit reviews and standard industry credit scoring models are used in performing this evaluation. Clients’ financial condition is continuously monitored as part of the normal course of business. Some of the Company’s clients are highly leveraged or otherwise subject to their own operating and regulatory risks.

Specific client provisions are made when a review of significant outstanding amounts, utilizing information about client creditworthiness, as well as current and future economic trends based on reasonable forecasts, indicates that collection is doubtful. The Company also records a general provision based on the overall risk profile of the receivables and through the assessment of reasonable economic forecasts. The risk profile is assessed on a quarterly basis using various methods, including external resources and credit scoring models. Accounts that are deemed uncollectible are written off when all reasonable collection efforts have been exhausted.

The Company has recorded a credit loss expense of $1.3 million and $9.1 million during the years ended December 31, 2021 and 2020, respectively, which is included in selling, general and administrative expenses in the consolidated statements of operations.

Receivables are stated net of allowances for credit losses in the consolidated balance sheets. Based on the clients’ account reviews and the continued uncertainty of the global economy, the Company has established an allowance for credit losses of $28.2 million as of December 31, 2021, and $33.8 million as of December 31, 2020.


	2021		2020
Balance at beginning of year	$	33.8	$	25.0
Transition adjustment for adoption of ASU 2016-13	—		8.4
Balance at beginning of year, including transition adjustment	33.8		33.4
Provisions	1.3		9.1
Write-offs	(6.9)		(8.8)

Translation and other	—		0.1
Balance at end of year	$	28.2	$	33.8