What were the other adjustments for the allowance for doubtful accounts for Budget in 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
|---|---|---|---|---|---|---|---|---|
| Allowance for Doubtful Accounts: Year Ended December 31, 2024 2023 2022 | 87 | $ | 87 | $ (3) | $ | (75) | $ 96 | |
| (a) Primarily currency translation adjustments. |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the allowance for doubtful accounts had other adjustments of $(75) million in 2022. The table provides a breakdown of the allowance for doubtful accounts over three years, detailing the beginning balance, expense (benefit), other adjustments, deductions, and ending balance.
The "other adjustments" primarily consist of currency translation adjustments, which can significantly impact financial reporting, especially for a global brand like Budget. Currency translation adjustments arise when a company consolidates financial statements of foreign subsidiaries that use a different functional currency.
For a prospective Budget franchisee, understanding these adjustments is crucial because they reflect the overall financial health and accounting practices of the company. While these adjustments don't directly impact the franchisee's day-to-day operations, they are part of the broader financial picture that indicates how Budget manages its assets and liabilities. Franchisees should consider these figures as part of their due diligence to assess the stability and transparency of the franchise system.
It is important to note that the amounts are in millions, so the other adjustments of $(75) represents a substantial amount. Reviewing these financial statements and understanding the underlying factors, such as currency translation adjustments, can provide valuable insights into the financial management of Budget.