Annual report pursuant to Section 13 and 15(d)

Accounts Receivable Accounts Receivable

v3.6.0.2
Accounts Receivable Accounts Receivable
 12 Months Ended
Dec. 31, 2016
Accounts Receivable [Abstract]  
Accounts Receivable
Accounts Receivable
The Company has two credit programs, the QVC Easy-Pay Plan offered in the U.S., Germany, the U.K., and Italy (known as Q-Pay in Germany and Italy) and the QVC-U.S. revolving credit card program. The QVC Easy-Pay Plan permits customers to pay for items in two or more installments. When the QVC Easy-Pay Plan 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 credit card is subsequently billed up to five additional monthly installments until the total purchase price of the products has been billed by the Company.
In 2014, QVC-U.S. 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 QVC branded credit card ("Q Card"). 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 Q Card, nor the extent that they will make payments on their outstanding balances. The net amount of finance income resulting from credit card operations is included as a reduction of selling, general and administrative expenses and was $100 million, $92 million and $80 million for the years ended December 31, 2016, 2015 and 2014, 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)
2016

2015

QVC Easy-Pay plan
$
1,054

1,197

Major credit cards and customers
221

192

Other receivables
68

67

 
1,343

1,456

Less allowance for doubtful accounts
(97
)
(86
)
Accounts receivable, net
$
1,246

1,370


A summary of activity in the allowance for doubtful accounts was as follows (in millions):
(in millions)
Balance
beginning
of year

Additions-
charged
to expense

Deductions-
write-offs

Balance
end of
year

2016
$
86

107

(96
)
97

2015
91

82

(87
)
86

2014
83

92

(84
)
91


The carrying value of accounts receivable, adjusted for the reserves described above, approximates fair value as of December 31, 2016, 2015 and 2014