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Accounts Receivable

12 Months Ended

Aug. 31, 2023

4. ACCOUNTS RECEIVABLE

Our trade accounts receivable are recorded at net realizable value, which includes an allowance for estimated credit losses as described in Note 1, Nature of Operations and Summary of Significant Accounting Policies. Under the guidance found in ASC Topic 326, the “expected credit loss” model requires consideration of a broader range of information to estimate expected credit losses over the lives of our trade accounts receivable.

We maintain an allowance for credit losses related to our trade accounts receivable for future expected credit losses resulting from the inability or unwillingness of our customers to make required payments. We estimate the allowance based upon consideration of various factors, including historical bad debts, current customer receivable balances, age of customer receivable balances, macroeconomic factors (such as risk and uncertainty generated by the pandemic), and the customers’ financial condition in relation to a representative pool of assets consisting of customers with similar risk characteristics. The allowance is adjusted as appropriate to reflect differences in current conditions as well as changes in forecasted macroeconomic conditions. Receivables that do not share risk characteristics are evaluated on an individual basis, including those associated with customers that have a higher probability of default. We do not have a significant amount of notes or other receivables.

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The following schedule provides a reconciliation of the activity in our allowance for estimated credit losses during the periods indicated (in thousands):



YEAR ENDED
AUGUST 31,		2023		2022		2021
Beginning balance	$	4,492	$	4,643	$	4,159
Charged to costs and expenses		(66)		306		1,553
Deductions		(636)		(457)		(1,069)
Ending balance	$	3,790	$	4,492	$	4,643

Deductions on the foregoing table represent the write-off of amounts deemed uncollectible during the fiscal year presented. During fiscal 2023, we received payment from customers whose accounts we had previously reserved against because of potential pandemic related uncertainties. Accordingly, we reversed a portion of the allowance during fiscal 2023 to reflect these payments. Recoveries of amounts previously written off were insignificant for the periods presented. No customer accounted for more than 10 percent of our sales or accounts receivable in any year presented.