CompUSA 2013 Annual Report Download - page 25

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21
Table of Contents
Accounting policy Assumptions and uncertainties
Quantification and analysis of effect on actual
results if estimates differ materially
Allowance for Doubtful Accounts Receivable
.
We record an allowance for doubtful accounts
to reflect our estimate of the collectibility of
our trade accounts receivable. While bad debt
allowances have been within expectations and
the provisions established, there can be no
guarantee that we will continue to experience
the same allowance rate we have in the past.
Our allowance for doubtful accounts policy
contains assumptions and judgments made by
management related to collectibility of aged
accounts receivable and chargebacks from
credit card sales. We evaluate the
collectibility of accounts receivable based on
a combination of factors, including an
analysis of the age of customer accounts and
our historical experience with accounts
receivable write-offs. The analysis also
includes the financial condition of a specific
customer or industry, and general economic
conditions. In circumstances where we are
aware of customer credit card charge-
backs or
a specific customer’s inability to meet its
financial obligations, a specific reserve for
bad debts applicable to amounts due to reduce
the net recognized receivable to the amount
management reasonably believes will be
collected is recorded. In those situations with
ongoing discussions, the amount of bad debt
recognized is based on the status of the
discussions.
We have not made any material changes to
our allowance for doubtful accounts
receivable reserve policy in the past three
years and we do not anticipate making any
material changes to this policy in the future.
However if our estimates are materially
different than our actual experience we could
have a material gain or loss adjustment.
A change of 10% in our allowance for
doubtful accounts reserve at December 31,
2013 would impact net income by
approximately $0.6 million.