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[Table of Contents](#i3e760ad3c5f94c5892b7ddc949ade806_7)degree of uncertainty as to the final consideration amount. Significant judgment is used in the estimate of variable consideration of customer contracts that are long-term and include uncertain transactional volumes.Technology or service components from third parties are frequently included in or combined with the Company’s applications or service offerings. Whether the Company recognizes revenue based on the gross amount billed to the customer or the net amount retained involves judgment in determining whether the Company controls the good or service before it is transferred to the customer. This assessment is made at the performance obligation level.Allocation of Transaction PriceThe transaction price, once determined, is allocated between the various performance obligations in the contract based upon their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using all information that is reasonably available, including reference to historical pricing data.COMPUTER SOFTWARE DEVELOPMENTThe Company capitalizes new product development costs incurred for software to be sold from the point at which technological feasibility has been established through the point at which the product is ready for general availability. Software development costs that are capitalized are evaluated on a product-by-product basis annually for impairment and are assigned an estimated economic life based on the type of product, market characteristics, and maturity of the market for that particular product. These costs are amortized based on current and estimated future revenue from the product or on a straight-line basis, whichever yields greater amortization expense. All of this amortization expense is included within components of operating income, primarily cost of revenue.The Company capitalizes development costs for internal use software beginning at the start of application development. Amortization begins on the date the software is placed in service and the amortization period is based on estimated useful life.CASH EQUIVALENTSThe Company considers all highly liquid investments with maturities of three months or less at the time of acquisition to be cash equivalents.ACCOUNTS RECEIVABLEReceivables are recorded at the time of billing. On July 1, 2020, the Company adopted FASB Accounting Standards Codification ("ASC") Topic 326, Financial Instruments - Credit Losses, ("CECL") (see "Recent Accounting Pronouncements" below). As a result, the Company changed its accounting policy for allowance for credit losses. The accounting policy pursuant to CECL is disclosed below. The adoption of CECL resulted in an immaterial cumulative effect adjustment recorded in retained earnings as of July 1, 2020.The Company monitors trade and other receivable balances and contract assets and estimates the allowance for lifetime expected credit losses. Estimates of expected credit losses are based on historical collection experience and other factors, including those related to current market conditions and events.The following table summarizes allowance for credit losses activity for the years ended June 30, 2022, and 2021:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended June 30, |
|  | 2022 |  | 2021 |
| Allowance for credit losses - beginning balance | $ | 7,266  |  |  | $ | 6,719  |  |
| Cumulative effect of accounting standards update adoption | —  |  |  | 493  |  |
| Current provision for expected credit losses | 1,740  |  |  | 2,130  |  |
| Write-offs charged against allowance | (1,389) |  |  | (2,070) |  |
| Recoveries of amounts previously written off | (1) |  |  | (3) |  |
| Other | —  |  |  | (3) |  |
| Allowance for credit losses - ending balance | $ | 7,616  |  |  | $ | 7,266  |  |

PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETSProperty and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets.42
