How does Chesters handle receivables that are determined to be uncollectible?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
experienced any losses in such accounts.
Accounts Receivable
Accounts receivable consist of trade receivables from customers and are stated at the amount the Company expects to collect, net of allowance. Accounts receivable also includes other receivables primarily related to rebate, incentive and corporate funding programs with suppliers. The Company extends credit based on an evaluation of the customer's financial condition. Exposure to loss on receivables is principally dependent on each customer's financial condition. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions. Management analyzes delinquent receivables on a continuing basis and, once any receivables are determined to be uncollectible, they are written off through a charge against the allowance. As of December 31, 2024 and 2023, the Company has recorded
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the company states accounts receivable at the amount they expect to collect, net of allowance. Chesters extends credit based on an evaluation of the customer's financial condition, and exposure to loss on receivables is principally dependent on each customer's financial condition. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions.
Chesters analyzes delinquent receivables on a continuing basis. When receivables are determined to be uncollectible, they are written off through a charge against the allowance.
As of December 31, 2024, Chesters recorded an allowance for credit losses of $7,726, and as of December 31, 2023, the company recorded an allowance for credit losses of $46,653. This indicates that Chesters sets aside funds to cover potential losses from uncollectible accounts, and the amounts can vary from year to year.