What was the ending balance in the allowance for credit losses for Even Hotels as of December 31, 2024?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
ntroduces expedients relating to common control lease transactions, effective for financial years beginning after December 15, 2023. There has been no effect on the consolidated balance sheets, consolidated statements of net income or financial statement disclosures in future years.
Future Adoption of Accounting Standards
In December 2023, the FASB issued ASU No. 2023-09, Income taxes (Topic 740): Improvement to Income Tax disclosures. This standard enhances the transparency and decision usefulness of income tax disclosures, effective for financial years beginning after December 15, 2025
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the ending balance in the allowance for credit losses as of December 31, 2024, was $53,457. This figure represents the amount that Even Hotels has set aside to cover potential losses from customers who may not pay their debts.
The allowance for credit losses is a contra-asset account that reduces the total amount of accounts receivable reported on the balance sheet. It is an estimate based on historical data, current economic conditions, and specific risks associated with outstanding receivables. The beginning balance in the allowance for credit losses was $44,963. During the period, there was a current period charge for expected credit losses of $9,170 and a current period charge to the System Fund of $4,658. Write-offs charged against the allowance totaled $4,231, and foreign exchange differences and other adjustments amounted to $1,103.
For a prospective Even Hotels franchisee, understanding the allowance for credit losses can provide insight into the financial health and risk management practices of the company. It demonstrates how Even Hotels accounts for potential uncollectible amounts and manages its receivables. Franchisees may want to inquire about the specific factors that influence the allowance for credit losses and how it could impact their financial performance.
It's important to note that the allowance for credit losses is an estimate, and actual losses may differ. Franchisees should consider this when evaluating the financial statements and assessing the overall risk associated with investing in an Even Hotels franchise.