Annual report pursuant to Section 13 and 15(d)

Accounts Receivable Accounts Receivable

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Accounts Receivable Accounts Receivable
 12 Months Ended
Dec. 31, 2018
Accounts Receivable [Abstract]  
Accounts Receivable
Accounts Receivable
The Company offers an installment sales plan (known as Easy-Pay for QVC-U.S. and the U.K.; Q-Pay in Germany and Italy and FlexPay at HSN). The installment sales plan permits customers to pay for items in two or more installments. When the installment sales 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 account is subsequently billed in up to five 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 PLCC company in the U.S. The agreement with the Bank was amended and restated in March 2017 and December 2018. 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. As a result of the adoption of ASC 606, $118 million of PLCC income was recorded in net revenue during the year ended December 31, 2018. Prior to adoption, the PLCC income was included as a reduction of selling, general and administrative expenses, which amounted to $105 million and $100 million for the years ended December 31, 2017 and 2016, 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)
2018

2017

Installment sales plan
$
1,533

1,396

Major credit cards and customers
269

295

Other receivables
97

80

 
1,899

1,771

Less allowance for doubtful accounts
(112
)
(91
)
Accounts receivable, net
$
1,787

1,680


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

Additions-
charged
to expense

Deductions-
write-offs

Balance
end of
year

2018
$
91

112

(91
)
112

2017
97

72

(78
)
91

2016
86

107

(96
)
97


The carrying value of accounts receivable, adjusted for the reserves described above, approximates fair value as of December 31, 2018, 2017 and 2016