What was the beginning balance for Bonchon's allowance for credit losses in 2023?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
e, which are included in accounts receivable, represent amounts the Company has an unconditional right to receive payment for, although invoicing is subject to contractual billing requirements. The Company assesses collectibility by reviewing accou
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the beginning balance for the allowance for credit losses in 2023 was $17,940. This figure represents the amount Bonchon had set aside at the start of 2023 to cover potential losses from uncollectible accounts receivable.
The allowance for credit losses is a contra-asset account that reduces the gross amount of accounts receivable to the net realizable value, which is the amount Bonchon realistically expects to collect. The beginning balance is a key component in understanding the company's financial health and its expectations regarding potential credit losses.
In 2023, Bonchon wrote off $17,940 in credit losses, which reduced the allowance to zero by the end of the year. This indicates that the initial estimate of potential losses was accurate, as the entire allowance was utilized to cover actual write-offs. In 2024, Bonchon's provision for credit losses was $14,355, resulting in an allowance for credit losses of $14,355 at the end of the year.