What do the trade accounts receivable for All States M.E.D. consist of?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
ists
- all material obligations have been provided
- the sales price is fixed or determinable and
- collectability is probable
Deferred revenue represents cash received from franchisees for franchise fees and area development fees for which revenue recognition criteria has not been met.
As of December 31, 2023, the Company has recorded deferred franchise fees of $0 relating to stores to be opened in future years or unamortized fees relating to open stores. These amounts are included in deferred revenues.
Notes to Financial Statements
December 31, 2023
1. Summary of Significant Accounting Policies – (Cont.)
d) Accounts Receivable
Trade accounts receivable consist of amounts due for franchise sales, are carried at their estimated collectible am
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, trade accounts receivable consist of amounts due for franchise sales. These receivables are recorded at their estimated collectible amounts, and trade credit is typically extended on a short-term basis, meaning they generally do not bear interest.
All States M.E.D. periodically assesses the collectability of these accounts based on the customer's past credit history and current financial condition. The company uses the reserve method of accounting for bad debts for financial reporting purposes and the direct write-off method for income tax purposes. Trade accounts receivable are charged against the allowance account when they are deemed uncollectible.
As of December 31, 2023, All States M.E.D. had a total of $0 in accounts reserved, and management considers all unreserved accounts receivable to be collectible. This indicates that All States M.E.D. believes that all outstanding receivables are likely to be paid.