Korn Ferry Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Credit Losses

Credit Losses

3 Months Ended

Jul. 31, 2023

Credit LossesThe Company is exposed to credit losses primarily through the services it provides. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future

economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience. When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions. The Company generally assesses future economic conditions for a period of sixty to ninety days, which corresponds with the contractual life of its accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.

The activity in the allowance for credit losses on the Company's trade receivables is as follows:


	(in thousands)
Balance at April 30, 2023	$	44,377
Provision for credit losses	5,965
Write-offs	(3,153)
Recoveries of amounts previously written off	95
Foreign currency translation	134
Balance at July 31, 2023	$	47,418

The fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, are as follows:


	Less Than 12 Months				12 Months or longer				Balance Sheet Classification
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Marketable Securities, Current		Marketable Securities, Non- Current

	(in thousands)
Balance at July 31, 2023

Corporate notes/bonds	$	—	$	—	$	18,121	$	203	$	18,121	$	—

Balance at April 30, 2023
Commercial paper	$	8,229	$	26	$	3,492	$	4	$	11,721	$	—
Corporate notes/bonds	$	9,581	$	123	$	13,815	$	232	$	20,489	$	2,907

The unrealized losses on 7 investments in commercial paper securities on April 30, 2023, and unrealized losses on 13 and 16 investments in corporate notes/bonds on July 31, 2023 and April 30, 2023, respectively, were caused by fluctuations in market interest rates. The Company only purchases high grade bonds that have a maturity from the date of purchase of no more than two years. The Company monitors the credit worthiness of its investments on a quarterly basis. The Company does not intend to sell the investments and does not believe it will be required to sell the investments before the investments mature and therefore recover the amortized cost basis.