Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 99

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 99
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 4% to 7%, reflecting market interest rates at the time of the transactions. Interest is accrued as it is earned. As of December 31, 2024 and December 31, 2023, accrued interest included in loans and notes receivable was not material.To determine the allowance for credit losses related to these loans and notes receivable, we employ a loss-rate analysis that considers historical loss data, current delinquency rates, the credit quality of the loan recipients, and the portfolio mix. This analysis is adjusted to account for current loan-specific risk characteristics and changes in the business environment that may impact our small business distributors. Factors influencing these conditions include general economic trends, market changes for their products and services, and changes in governmental regulations. For periods beyond the reasonable and supportable forecast period, we use a reversion methodology, as many of our loans and notes receivable have longer terms. Allowances for impaired loans are typically based on collateral values or the present value of estimated cash flows. Additional details regarding our allowance for credit losses can be found in Note 3.To mitigate the risk of non-collection, we generally withhold commissions payable to the distributors to cover the monthly payments due on the receivables. Our notes receivable also typically grant us the right to acquire a distributor's customer list in the event of default. As of December 31, 2024 and December 31, 2023, past due amounts and receivables placed on non-

51

DELUXE CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)

accrual status were not material. Decisions to place receivables on non-accrual status or to resume interest accruals are made on a case-by-case basis, considering the specifics of each situation.Cloud computing arrangements – Implementation costs incurred in a hosting arrangement that qualifies as a service contract are recorded as non-current assets on the consolidated balance sheets. These implementation costs encompass activities such as integrating, configuring, and customizing the related software. When evaluating whether our cloud computing arrangements include a software license, we consider if we have the contractual right to take possession of the software at any point during the hosting period without incurring significant penalties, and whether it is feasible for us to either run the software on our own hardware or contract with an unrelated third party to host the software.If we determine that a cloud computing arrangement includes a software license, we account for the software license element in a manner consistent with the acquisition of other