Affirm Holdings Inc

6. Balance Sheet Components

Accounts Receivable, net

Our accounts receivable consist primarily of amounts due from payment processors, merchant partners, affiliate network partners and servicing fees due from third-party loan owners. For each of these groups, we evaluate accounts receivable to determine management’s current estimate of expected credit losses based on historical experience and future expectations and record an allowance for credit losses. Our allowance for credit losses with respect to accounts receivable was $12.1 million and $12.9 million as of December 31, 2023 and June 30, 2023, respectively.

Property, Equipment and Software, net

Property, equipment and software, net consisted of the following (in thousands):

Depreciation and amortization expense on property, equipment and software was $36.5 million and $62.5 million for the three and six months ended December 31, 2023, respectively, and $15.6 million and $29.1 million for the three and six months ended December 31, 2022, respectively.

No impairment losses related to property, equipment and software were recorded during the three and six months ended December 31, 2023 and 2022.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill during the six months ended December 31, 2023 were as follows (in thousands):

(1)Adjustments to goodwill during the six months ended December 31, 2023 primarily pertained to foreign currency translation adjustments.

During the three and six months ended December 31, 2023, we recognized goodwill impairment losses of $1.0 million included in general and administrative expenses within the interim condensed consolidated statement of operations and comprehensive loss. No impairment losses related to goodwill were recorded during the three and six months ended December 31, 2022.

Intangible assets consisted of the following (in thousands):

Amortization expense for intangible assets was $2.9 million and $17.1 millionfor thethree and six months ended December 31, 2023, respectively, and$7.4 million and$14.8 million for thethree and six months ended December 31, 2022, respectively. No impairment losses related to intangible assets were recorded during the three and six months ended December 31, 2023 and 2022.

The expected future amortization expense of these intangible assets as of December 31, 2023 is as follows (in thousands):

Commercial Agreement Assets

In November 2021, we granted warrants in connection with our commercial agreements with certain subsidiaries of Amazon.com, Inc. (“Amazon”). The warrants were granted in exchange for certain performance provisions and the benefit of acquiring new users. We recognized an asset of $133.5 million associated with the portion of the warrants that were fully vested upon grant. The asset was valued based on the fair value of the warrants and represents the probable future economic benefit to be realized over the approximate three year term of the commercial agreement at the grant date. For the three and six months ended December 31, 2023, we recognized amortization expense of $10.4 million and $20.9 million, respectively, and $10.5 million and $20.9 million forthe three and six months ended December 31, 2022, respectively, in our interim condensed consolidated statements of operations and comprehensive loss as a component of sales and marketing expense. Refer to Note 14. Stockholders’ Equity for further discussion of the warrants.

In January 2021, we recognized an asset in connection with a commercial agreement with an enterprise partner, in which we granted stock appreciation rights in exchange for the benefit of acquiring access to the partner's consumers. This asset represents the probable future economic benefit to be realized over thethree-year expected benefit period and is valued based on the fair value of the stock appreciation rights on the grant date. We initially recognized an asset of $25.9 million associated with the fair value of the stock appreciation rights. During the three and six months ended December 31, 2023, we recorded amortization expense of $2.1 million and $4.2 million, respectively, related to the asset which is now fully amortized. During the three and six months ended December 31, 2022, we recorded amortization expense related to the asset of $2.1 million and $4.2 million, respectively.

In July 2020, we recognized an asset in connection with a commercial agreement with Shopify Inc. (“Shopify”), in which we granted warrants in exchange for the opportunity to acquire new merchant partners. This asset represents the probable future economic benefit to be realized over the expected benefit period and is valued based on the fair value of the warrants on the grant date. We recognized an asset of $270.6 million associated with the fair value of the warrants, which were fully vested as of December 31, 2023. The expected benefit period of the asset was initially estimated to befour years, and the remaining useful life of the asset is reevaluated each reporting period. During fiscal year 2022, the remaining expected benefit period was extended bytwo years upon the execution of an amendment to the commercial agreement with Shopify which extended the term of the agreement. During the three and six months ended December 31, 2023, we recorded amortization expense related to the commercial agreement asset of $9.0 million and $18.1 million, respectively, and $9.1 million and $18.1 million forthe three and six months ended December 31, 2022, respectively, in our interim condensed consolidated statements of operations and comprehensive loss as a component of sales and marketing expense.

Other Assets

Other assets consisted of the following (in thousands):

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands)