What were the deductions for the Allowance for Doubtful Accounts for Budget for the year ended December 31, 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ed average interest rate of 8.01%. These notes were issued under previously outstanding series of debt.
In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities.
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Schedule II – Valuation and Qualifying Accounts
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
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Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the deductions for the Allowance for Doubtful Accounts for the year ended December 31, 2022, were $ (86) million. This figure represents the amount that Budget wrote off from its accounts receivable as uncollectible during that year.
The Allowance for Doubtful Accounts is a contra-asset account used to estimate the amount of accounts receivable that a company does not expect to collect. Deductions from this allowance typically occur when specific customer accounts are deemed uncollectible and are written off. The beginning balance for the allowance for doubtful accounts for 2022 was $84 million, expense (benefit) was $(3) million, other adjustments were not specified, deductions were $(86) million, leading to an ending balance of $86 million.
For a prospective Budget franchisee, understanding these figures is crucial for assessing the financial health and stability of the company. It provides insight into how Budget manages its credit risk and the effectiveness of its collection efforts. A high level of deductions might indicate a more lenient credit policy or difficulties in collecting payments from customers, which could indirectly affect franchisee revenues and financial planning.