What was the reported allowance for credit losses for Chem Dry in 2021?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Trade receivables | $2,880 | $5,231 | $8,483 |
| Other | 431 | 432 | 864 |
| Less - Allowance for credit losses | 973 | 2,589 | 3,016 |
| Net accounts receivable | $2,338 | $3,074 | $6,331 |
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the allowance for credit losses in 2021 was reported in two separate tables. One table shows the allowance for credit losses related to trade receivables, while the other shows the allowance for credit losses related to deferred tax assets. It is important to note that the table reports numbers with 000s omitted.
In the first table, the allowance for credit losses related to trade receivables was $3,016 in 2021. This allowance reduces the gross trade receivables of $8,483 to a net accounts receivable of $6,331. This indicates the amount of trade receivables Chem Dry expected to be uncollectible.
In the second table, the allowance for credit losses related to deferred tax assets was $1,312 in 2021. This allowance is part of the calculation of net deferred tax liability, which was $(5,596) in 2021. Understanding these allowances is crucial for assessing Chem Dry's financial health and potential risks related to uncollectible accounts and deferred tax assets.