What was the expense (benefit) for the allowance for doubtful accounts for Budget in 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 expense (benefit) for the allowance for doubtful accounts in 2022 was $(3) million. This figure represents an adjustment to account for potential uncollectible receivables.
In accounting terms, 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. When the allowance increases, it represents an expense, reducing net income. Conversely, when the allowance decreases, it represents a benefit, increasing net income. In Budget's case, the $(3) million indicates a reduction in the allowance, which positively impacts the company's financial results for that year.
For a prospective Budget franchisee, understanding these financial adjustments provides insight into the company's financial management and its approach to handling potential credit risks. It's important to note that these figures are in millions, so the actual impact is significant. Reviewing these trends over several years, as presented in the table, can offer a more comprehensive view of Budget's financial health and stability.