What is the reported total value of accounts receivable for Creative World School?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalties receivable are uncollateralized franchisee obligations for franchise royalties and are due on the first day of the month following the sale in accordance with the franchise agreement.
Royalties receivable are stated at the amount management expects to collect from balances outstanding at year end. The carrying amount of royalties receivable is reduced by an allowance for credit losses based on historical experience adjusted for current conditions and reasonable forecasts taking into account geographic and industry-specific economic factors. The Company also considers any specific customer collection issues. At origination, the Company evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit rating, probabilities of default, industry trends and other internal metrics. On a continuing basis, data for each major customer is regularly reviewed based on past-due status to evaluate the adequacy of the allowance for credit losses.
Management provides for probable uncollectible amounts through a charge to earnings and a credit to the allowance for credit losses based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to royalties receivable. There was no allowance for credits losses for the years ended December 31, 2024, 2023, and 2022.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, the franchise royalties receivable are uncollateralized franchisee obligations for franchise royalties and are due on the first day of the month following the sale in accordance with the franchise agreement. These royalties receivable are stated at the amount that Creative World School's management expects to collect from outstanding balances at the end of the year. The amount of royalties receivable is reduced by an allowance for credit losses based on historical experience, current conditions, and reasonable forecasts, considering geographic and industry-specific economic factors. Creative World School also considers any specific customer collection issues.
At the beginning of the agreement, Creative World School evaluates credit risk based on factors such as prior payment experience, customer financial information, credit rating, probabilities of default, industry trends, and other internal metrics. On a continuing basis, data for each major customer is regularly reviewed based on past-due status to evaluate the adequacy of the allowance for credit losses. Management provides for probable uncollectible amounts through a charge to earnings and a credit to the allowance for credit losses based on its assessment of the current status of individual accounts.
Balances that remain outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to royalties receivable. The FDD states that there was no allowance for credit losses for the years ended December 31, 2024, 2023, and 2022. The document does not specify the total value of accounts receivable for Creative World School.