What were the other adjustments for the Allowance for Doubtful Accounts for Budget for the year ended December 31, 2023?
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 | |
| 86 | 86 | 1 | (86) | 87 | ||||
| 84 | 91 | (3) | (86) | 86 | ||||
| (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 table provides details on the allowance for doubtful accounts. For the year ended December 31, 2023, the "Other Adjustments" to the allowance for doubtful accounts was $1 million. The footnote to the table indicates that these other adjustments primarily consist of currency translation adjustments.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts is crucial. This allowance represents the amount of accounts receivable that Budget estimates will not be collected. The adjustments reflect changes to this estimate over time. The "Other Adjustments" figure of $1 million for 2023 indicates that currency translation adjustments had a positive impact on the allowance during that year.
Currency translation adjustments arise when Budget has operations in multiple countries and needs to convert financial statements from local currencies to U.S. dollars for reporting purposes. Fluctuations in exchange rates can lead to gains or losses that affect the reported value of assets and liabilities, including the allowance for doubtful accounts. This is a fairly standard accounting practice for multinational corporations like Budget.