What was the allowance for credit losses for Clear Pest Pros as of December 31, 2023?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
ed Financial Statements (dollars in thousands)**
5. Accounts Receivable
The following is the detail of accounts receivable:
| December 31, | 2024 | 2023 | 2022 |
|---|---|---|---|
| Trade receivables | $ 2,627 | $ 2,880 | $ 5,231 |
| Other | 979 | 431 | 432 |
| Less: allowance for credit losses | 878 | 973 | 4,589 |
| Net Accounts Receivable | $ 2,728 | $ 2,338 | $ 3,074 |
The activity in the allowance for credit loss
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 67)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, the allowance for credit losses as of December 31, 2023, was $973 for trade receivables. This is the amount Clear Pest Pros has set aside to cover potential losses from customers who may not pay their invoices. This figure represents the company's estimate of uncollectible accounts receivable.
In addition to trade receivables, Clear Pest Pros also had an allowance for credit losses related to deferred tax assets. As of December 31, 2023, this allowance was $531. This allowance accounts for potential losses related to the realization of deferred tax assets, which are assets that arise from temporary differences between the accounting and tax treatment of certain items.
It's important to note that Clear Pest Pros calculates these allowances using an expected loss model. This model considers historical loss rates, current economic conditions, and reasonable forecasts to estimate potential credit losses. Prospective franchisees should understand how these allowances are calculated and what factors could influence future credit losses, as these can impact the company's financial performance.