What does 'accounts receivable, principally from Members, net' primarily consist of for Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounts receivable, principally from Members, net primarily consists of amounts due from hoteliers with whom the Company has membership, franchise, or license agreements and includes reimbursements of costs the Company incurred on behalf of the hoteliers. These amounts represent amounts owed to the Company by its customers that are recorded at their amortized cost. The Company also records allowances for current expected credit losses. These allowances are based on the Company's assessment of customers credit risk and the collectability of accounts by considering the age of each outstanding invoice and an evaluation of expected risk of credit loss based on current conditions and reasonable and supportable forecasts of future economic conditions over the life of the receivable. The Company pools its trade receivables based on similar risk characteristics in estimating its expected credit losses. In situations where a trade receivable does not share the same risk characteristics with others, the Company measures it individually. The Company also continuously evaluates such pooling decisions and adjusts as needed from period to period as risk characteristics change.
Credit losses for trade receivables are recorded in general and administrative expense in the Consolidated Statements of Revenues and Expenses. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the allowance at November 30, 2024.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, 'accounts receivable, principally from Members, net' primarily consists of the amounts due from hoteliers who have membership, franchise, or license agreements with Bw Premier Collection. This also includes reimbursements of costs that Bw Premier Collection incurred on behalf of these hoteliers. These receivables are recorded at their amortized cost, representing the amounts owed to Bw Premier Collection by its customers.
Bw Premier Collection also accounts for potential credit losses by recording allowances for current expected credit losses. These allowances are determined by assessing the credit risk of customers and the collectability of accounts. This assessment involves considering the age of outstanding invoices and evaluating the expected risk of credit loss based on current conditions and forecasts of future economic conditions. To estimate expected credit losses, Bw Premier Collection groups its trade receivables based on similar risk characteristics. Receivables that do not share the same risk characteristics are measured individually. The company continuously evaluates and adjusts these pooling decisions as risk characteristics change.
Credit losses for trade receivables are recorded as general and administrative expenses in the Consolidated Statements of Revenues and Expenses. Account balances are charged off against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote. Any expected recoveries of amounts previously written off are included in determining the allowance as of November 30, 2024, but these recoveries cannot exceed the aggregate amount previously written off.