Cogeco 2012 Annual Report Download - page 76

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Consolidated financial statements COGECO CABLE INC. 2012 75
The Corporation is also exposed to credit risk in relation to its trade accounts receivable. To mitigate such risk, the Corporation
continuously monitors the financial condition of its customers and reviews the credit history or worthiness of each new large customer. At
August 31, 2012 and August 31, 2011, no customer balance represented a significant portion of the Corporation’s consolidated trade
accounts receivable. The Corporation establishes an allowance for doubtful accounts based on specific credit risk of its customers by
examining such factors as the number of overdue days of the customer’s balance outstanding as well as the customer’s collection history.
The Corporation believes that its allowance for doubtful accounts is sufficient to cover the related credit risk. The Corporation has credit
policies in place and has established various credit controls, including credit checks, deposits on accounts and advance billing, and has
also established procedures to suspend the availability of services when customers have fully utilized approved credit limits or have
violated existing payment terms. Since the Corporation has a large and diversified clientele dispersed throughout its market areas in
Canada, there is no significant concentration of credit risk.
The following table provides further details on the Corporation’s accounts receivable balances, net of allowance for doubtful accounts:
A
ugust 31, 2012 August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $ $ $
Trade accounts receivable 65,570 74,429 67,189
A
llowance for doubtful accounts (2,866) (7,242) (7,478)
62,704 67,187 59,711
Other accounts receivable 5,716 7,498 7,241
68,420 74,685 66,952
Trade accounts receivable past due is defined as amount outstanding beyond normal credit terms and conditions for the respective
customers. A large portion of the Corporation’s customers are billed in advance and are required to pay before their services are rendered.
The Corporation considers amount outstanding at the due date as trade accounts receivable past due. The following table provides further
details on trade accounts receivable past due net of allowance for doubtful accounts at August 31, 2012 and 2011 and September 1,
2010:
A
ugust 31, 2012 August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $ $ $
Less than 60 days overdue 9,530 12,840 13,037
60 to 90 days overdue 431 565 1,034
More than 90 days overdue 1,092 3,649 2,823
11,053 17,054 16,894
The following table shows changes in the allowance for doubtful accounts for the year ended August 31, 2012 and 2011:
August 31, 2012 August 31, 2011
(In thousands of Canadian dollars) $ $
Balance, beginning of the year 7,242 7,478
Provision for impaired receivables 25,110 26,902
Reversal of provision for amounts collected (4,760) (5,247)
A
mounts written off as uncollectible (20,825) (22,149)
Discontinued operations (3,901) 258
Balance, end of the year 2,866 7,242