IHOP 2008 Annual Report Download - page 107

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DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
4. Receivables (Continued)
The following table summarizes the activity in the allowance for doubtful accounts:
Accounts and Notes
Receivable
(In thousands)
Balance at December 31, 2005 ................................. $1,335
Provision ............................................... 1,149
Charge-offs ............................................. (1,154)
Recoveries .............................................. 29
Balance at December 31, 2006 ................................. 1,359
Provision ............................................... 2,039
Charge-offs ............................................. (399)
Recoveries .............................................. —
Balance at December 31, 2007 ................................. 2,999
Provision ............................................... 1,280
Charge-offs ............................................. (1,548)
Recoveries .............................................. 210
Balance at December 31, 2008 ................................. $2,941
5. Assets Held for Sale
The Company classifies assets as held for sale and ceases the amortization of the assets when there
is a plan for disposal of the assets and those assets meet the held for sale criteria as defined in SFAS
No. 144. Reacquired franchises, property and equipment and other assets held for sale are accounted
for on the specific identification basis.
Reacquired franchises
For reacquired franchises, the Company records the franchise and equipment at the lower of
(1) the sum of the franchise receivables and costs of reacquisition, or (2) the estimated net realizable
value at the reacquisition date. Pending the sale of such franchise, the carrying value is amortized
ratably over the remaining life of the asset or lease, and the estimated net realizable value is evaluated
in conjunction with our impairment evaluation of long-lived assets. There was $515,000 in reacquired
franchises and equipment held for sale at December 31, 2007 and none at December 31, 2008.
Property and equipment
In May 2007, Predecessor Applebee’s signed a contract to sell its then-current corporate
headquarters for $9.0 million, net of commissions. The Company closed this transaction in January
2008 and did not recognize a gain or loss. In December 2007, the Company began to actively market its
corporate aircraft. The Company closed the sale of the aircraft in January 2008 for approximately
$3.0 million. No gain or loss was recognized.
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