What was the provision for doubtful accounts for Engel & Volkers in 2024?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
and financial history annually, historical losses recorded and reassessing any insolvency risk that is identified. If a failure to pay is anticipated due to these conditions, the Company assesses the terms of the notes and estimates an expected credit loss.
The allowa
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the provision for doubtful accounts in 2024 was $644,206. This figure represents the amount Engel & Volkers allocated to cover potential losses from accounts receivable that may not be fully collectible. This is an estimate made by the management of Engel & Volkers.
The allowance for doubtful accounts is a contra-asset account that reduces the gross amount of accounts receivable to the net realizable value, which is the amount Engel & Volkers realistically expects to collect. The provision is an expense recognized on the income statement, reflecting the cost of potential bad debts during the accounting period. The beginning balance for the allowance for doubtful accounts was $535,075 in 2024. Write-offs for the same year totaled $115,995. The allowance for doubtful accounts at the end of 2024 was $1,063,286.
For a prospective Engel & Volkers franchisee, understanding the provision for doubtful accounts can offer insight into the credit risk associated with the company's receivables. It reflects how Engel & Volkers manages and accounts for the risk of non-payment from its customers or franchisees. A higher provision might indicate a more conservative approach to revenue recognition or a higher risk environment, while a lower provision could suggest a more optimistic outlook on collections or a lower risk environment.