What was the allowance for credit losses for Ben Jerrys' accounts receivable as of December 31, 2022?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2 30 | |
|---|---|
| Gross profit | 2,005 |
| Selling, general and administrative expenses | 2,700 |
| Loss from operations | (695) |
| Other expense: | |
| Interest expense from related party | ( 2) |
| Loss before income taxes | (697) |
| Income tax benefits | 1 46 |
| Net loss | $ (551) |
Consolidated Balance Sheets BEN & JERRY'S FRANCHISING, INC. AND SUBSIDIARY (In Thousands)
| 2023 | 2022 | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash | $ 1,386 | $ 1,308 |
| Accounts receivable, allowance for credit losses of $45 | 375 | 321 |
| and $105 at December 31, 2023 and 2022, respectively |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 89–133)
What This Means (2025 FDD)
According to Ben Jerrys' 2025 Franchise Disclosure Document, the allowance for credit losses related to accounts receivable was $105,000 as of December 31, 2022. This figure is part of the consolidated balance sheets presented in the financial statements.
In accounting terms, the allowance for credit losses is an estimate of the amount of accounts receivable that Ben Jerrys does not expect to collect. This is a contra-asset account that reduces the gross amount of accounts receivable to the net realizable value, which is the amount the company realistically expects to receive. A higher allowance suggests a greater risk of uncollectible accounts.
For a prospective Ben Jerrys franchisee, this figure provides insight into the credit risk associated with the company's receivables. While franchisees may not directly deal with these specific receivables, understanding the financial health and accounting practices of the franchisor is crucial. It's also important to note that Ben Jerrys reviews its allowance for credit loss accounts monthly and considers factors like historical loss experience and economic conditions to estimate expected credit losses.