Company: INSP
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001609550-25-000011
Chunk: 98

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 8
Chunk 98
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 by the highest quality financial and non-financial companies. We place restrictions on maturities and concentration by type and issuer. We are exposed to credit risk in the event of a default by the issuers of these securities to the extent recorded on the consolidated balance sheets. However, as of December 31, 2024 and 2023, we limited our credit risk associated with cash equivalents by placing investments with banks we believe are highly creditworthy.We believe that the credit risk in our accounts receivable is mitigated by our credit evaluation process, relatively short collection terms, and dispersion of our customer base. We generally do not require collateral, and losses on accounts receivable have historically not been significant.Accounts Receivable and Allowance for Expected Credit LossesTrade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the general standard being net 30 days. Collateral or any other security to support payment of these receivables generally is not required. Each reporting period, we estimate the credit loss related to accounts receivable based on a migration analysis of accounts grouped by individual receivables delinquency status and apply our historic loss rate adjusted for management's assumption of future market conditions. Any change in the allowance from new receivables acquired or changes due to credit deterioration on previously existing receivables is recorded in selling, general and administrative expenses. Write-offs of receivables considered uncollectible are deducted from the allowance. Specific accounts receivable are written off once a determination is made that the amount is uncollectible. The write-off is recorded in the period in which the account receivable is deemed uncollectible. Recoveries are recognized when received and as a direct credit to earnings or as a reduction to the allowance for credit losses (which would indirectly reduce the loss by decreasing bad debt expense).The following table presents the changes in the allowance for credit losses related to accounts receivable:Year Ended December 31,202420232022Balance at beginning of period$1,648 $36 $99 Charges (credits) to the allowance, net957 1,622 (13)Accounts written off, net of recoveries(1,725)(10)(50)Balance at the end of the period$880 $1,648 $36 The increase in charges to the allowance during the year ended December 31, 2023 relate primarily to accounts receivable with two healthcare systems and the increase in accounts written off,