What was the allowance for credit losses for Atwell Suites at December 31, 2021?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
nses from the Parent. Such allocations are not intended to represent the costs that would be or would have been incurred if the Company were a standalone operation.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported year. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include s
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites's 2025 Franchise Disclosure Document, the allowance for credit losses at December 31, 2021, was $11,930,910. This figure represents an estimate of potential losses from accounts receivable that Atwell Suites expected to incur.
However, the FDD indicates that beginning January 1, 2022, the responsibility for covering any expected lifetime credit losses shifted to Atwell Suites's parent company, Six Continents Hotels, Inc. Consequently, the allowance for expected credit losses was no longer included in Atwell Suites's financial statements. As a result, the $11,930,910 balance was released to the income statement in the year ended December 31, 2022, and the allowance for credit losses at December 31, 2022, 2023 and 2024 is $0.
For a prospective franchisee, this accounting change means that Atwell Suites, as a separate entity, is no longer directly responsible for absorbing credit losses from its accounts receivable after 2021. The parent company now bears this risk. This could potentially impact Atwell Suites's financial performance and stability, as credit losses can significantly affect a company's profitability. It is important to note that there is no change as a result of recent amendments in the Agreement dated January 1, 2024.