Annual report pursuant to Section 13 and 15(d)

Receivables, Loans, Notes Receivable, and Others (Policies)

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Receivables, Loans, Notes Receivable, and Others (Policies)
 12 Months Ended
Dec. 31, 2020
Receivables [Abstract]  
Accounts Receivable Accounts Receivable
The Company offers an installment payment option in all of our markets other than Japan (known as Easy-Pay for the QVC brand in the U.S. and the U.K.; Q-Pay in Germany and Italy and FlexPay for the HSN brand). The installment payment option permits customers to pay for items in two or more installments. When the installment payment option is offered by QVC and elected by the customer, the first installment is typically billed to the customer's credit card upon shipment. Generally, the customer's account is subsequently billed in additional monthly installments until the total purchase price of the products has been billed by the Company.
In 2014, the Company amended and restated its agreement with a large consumer financial services company (the "Bank") pursuant to which the Bank provides revolving credit directly to QVC's customers for the sole purpose of purchasing merchandise or services with a private label credit card ("PLCC") company in the U.S. The agreement with the Bank was amended and restated in March 2017 and December 2018 related to its QVC brand. In December 2018, the Company entered into a separate agreement with the Bank for its HSN brand. The Company receives a portion of the net economics of the credit card program. The Company cannot predict the extent to which customers will use the PLCC, nor the extent that they will make payments on their outstanding balances. PLCC income of $140 million, $124 million and $118 million was recorded in net revenue during the years ended December 31, 2020, 2019 and 2018, respectively.
The Company also accepts major credit cards for its sales. Accounts receivable from major credit cards represents amounts owed to QVC from the credit card clearing houses for amounts billed but not yet collected.
Accounts receivable consisted of the following:
December 31,
(in millions) 2020 2019
Installment payment option $ 1,368  1,586 
Major credit cards and customers 262  247 
Other receivables 96  103 
1,726  1,936 
Less allowance for credit losses (124) (123)
Accounts receivable, net $ 1,602  1,813 
A summary of activity in the allowance for credit losses was as follows:
(in millions) Balance
beginning
of year		 Additions-
charged
to expense		 Deductions-
write-offs		 Balance
end of
year
2020 $ 123  89  (88) 124 
2019 112  124  (113) 123 
2018 91  112  (91) 112 
The carrying value of accounts receivable, adjusted for the reserves described above, approximates fair value as of December 31, 2020 and 2019