How does Cinch I.T. carry its trade receivables?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company carries its trade receivables at cost. On a periodic basis, management evaluates its trade receivables and establishes an allowance for credit losses when deemed necessary. The Company's policy is to not accrue interest on trade receivables. An allowance for credit losses is an estimate based upon historical account Write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends and macroeconomic factors. Credit quality is monitored through the timing of payments compared to payment terms and known facts regarding the financial condition of debtors. Accounts receivable balances are charged
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the company carries its trade receivables at cost. This means that the value of the receivables on the company's balance sheet reflects the original transaction price.
Cinch I.T. management evaluates its trade receivables periodically and establishes an allowance for credit losses when necessary. This allowance is an estimate based on historical account write-off trends, the current financial condition of the debtor, forecasts of future operating results, and macroeconomic factors. The company's policy is not to accrue interest on trade receivables.
Credit quality is monitored by Cinch I.T. through the timing of payments compared to payment terms and known facts regarding the financial condition of debtors. Accounts receivable balances are charged.