What was the net amount of accounts receivable reported for Carbones Pizzeria?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
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Cash and Cash Equivalents
The Company holds cash and cash equivalents at times may exceed federal insurance limits; however, the Company does not anticipate any losses related to this balance.
The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable for royalty fees from franchisees are due on or before the first day of each week for the sales during the preceding week and accounts receivable for advertising fee royalties from franchisees are due on or before Tuesday of each week for the sales during the preceding week. All receivables not received on time receive additional scrutiny from management and may be charged interest at rates up to 12% annually.
As of January 1, 2023, accounts receivable was $232,832.
In June 2016, the FASB issued guidance (FASB ASC 326) which changed how entities measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The most significant change in this standard is a shift from the incurred loss model to the expected loss model. Under the standard, disclosures are required to provide users of the financial statements with useful information in analyzing an entity's exposure to credit risk and the measurement of credit losses. Financial assets held
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to the 2025 FDD, as of January 1, 2023, Carbones Pizzeria had accounts receivable of $232,832. These receivables primarily consist of royalty and advertising fees due from franchisees. Royalty fees are due on or before the first day of each week for the sales of the preceding week, while advertising fee royalties are due on or before Tuesday of each week for the previous week's sales.
Carbones Pizzeria scrutinizes receivables not received on time and may charge interest on overdue amounts at rates up to 12% annually. This practice is in place to ensure timely payments and manage potential credit losses.
In June 2016, the FASB issued guidance (FASB ASC 326) which changed how entities measure credit losses for most financial assets. Carbones Pizzeria adopted the standard effective January 1, 2023, but the impact of the adoption was not considered material.