Aarons 2015 Annual Report Download - page 61
Download and view the complete annual report
Please find page 61 of the 2015 Aarons annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51 -
52 -
53 -
54 -
55 -
56 -
57 -
58 -
59 -
60 -
61 -
62 -
63 -
64 -
65 -
66 -
67 -
68 -
69 -
70 -
71 -
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
 |
 |
Accounts Receivable
Accounts receivable consist primarily of receivables due from customers of Company-operated stores and Progressive, corporate receivables incurred during
the normal course of business and franchisee obligations. Corporate receivables include receivables for vendor consideration, the secondary escrow described
in Note 2 and in-transit credit card amounts related to customer transactions at Company-operated stores.
Accounts receivable, net of allowances, consists of the following as of December 31:
Customers $ 35,153
$ 30,438
Corporate 26,175
32,572
Franchisee 52,111
44,373
$ 113,439
$ 107,383
The Company maintains an accounts receivable allowance, which primarily relates to its store-based operations and its Progressive division. For the
Company's store-based operations, contractually required lease payments are accrued when due; however, they are not always collected and customers can
terminate the lease agreements at any time. For customers that do not pay timely, the Company's store-based operations generally focus on obtaining a return
of the lease merchandise. Therefore the Company’s policy for its store-based operations is to accrue a provision for returns and uncollectible contractually
due renewal payments based on historical collection experience, which is recognized as a reduction of revenue. Store-based operations write off lease
receivables that are 60 days or more past due on pre-determined dates occurring twice monthly.
The Company’s policy for its Progressive division is to accrue for uncollected amounts due based on historical collection experience. The provision is
recognized as bad debt expense classified in operating expenses. The Progressive division writes off lease receivables that are 120 days or more contractually
past due.
The following is a summary of the Company’s accounts receivable allowance as of December 31:
Beginning Balance $ 27,401
$ 7,172
$ 6,001
Accounts written off (155,651)
(79,054)
(34,723)
Accounts receivable provision 163,111
99,283
35,894
Ending Balance $ 34,861
$ 27,401
$ 7,172
The following table shows the amounts recognized for bad debt expense and provision for returns and non-renewals for the years ended December 31:
Bad debt expense 122,184
60,514
—
Provision for returns and uncollected renewal payments 40,927
38,769
35,894
Accounts receivable provision $ 163,111
$ 99,283
$ 35,894
Loans Receivable, Net
Loans receivable, net represents the principal balances of credit card charges at DAMI's participating merchants that remain outstanding to cardholders, plus
unpaid interest, capitalized origination costs and fees due from cardholders, net of an allowance for uncollectible amounts and unamortized fees (which
include merchant fees, promotional fees and deferred annual card fees).
60