How often does Carbones Pizzeria review its allowance for expected credit losses?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ounts receivable. The impact of the adoption was not considered material to the financial statements and primarily resulted in enhanced disclosures only.
The Company's allowance for expected credit losses, is Management's best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for expected credit losses periodically. Management determines an allowance based on historical experience and then analyzes individual past due balances for collectability based on current conditions and reasonable and supportable forecasts.
In addition, if Management believes it is probable a receivable will not be recovered, i
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the company reviews its allowance for expected credit losses periodically. This allowance represents management's best estimate of potential credit losses within its existing accounts receivable.
Management determines the allowance based on historical experience and analyzes individual past due balances to assess collectability, considering current conditions and reasonable forecasts. If management believes a receivable is unlikely to be recovered, it is charged off against the allowance.
For the year ending October 31, 2024, the allowance for credit losses for accounts receivable totaled $175,595. This indicates the company's estimation of potential uncollectible amounts from franchisees. Franchisees should be aware that Carbones Pizzeria actively monitors accounts receivable and may charge interest on late payments, as well as scrutinize those accounts more closely.