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Analysis of Bad Debts
Allowance for doubtful accounts receivable (bad debts) is a contra account which reduce the balance of the company's gross accounts receivable.The relationship between the allowance and the balance in receivables should be relatively constant unless there is a change in the economy overall or a change in customer base.
Receivables Accounting Policy
Allowance for Doubtful Accounts
CSX maintains an allowance for doubtful accounts on uncollectible amounts related to freight receivables, government reimbursement receivables, claims for damages and other various receivables. The allowance is based upon the creditworthiness of customers, historical experience, the age of the receivable and current market and economic conditions. Uncollectible amounts are charged against the allowance account. Allowance for doubtful accounts of $26 million and $33 million is included in the consolidated balance sheets as of December 2017 and December 2016, respectively.
Source: CSX Corp., Annual Report
Allowance for Doubtful Accounts Receivable
|Dec 31, 2017||Dec 30, 2016||Dec 25, 2015||Dec 26, 2014||Dec 27, 2013|
|Selected Financial Data (USD $ in millions)|
|Allowance for doubtful accounts|
|Accounts receivable, gross|
|Allowance as a percentage of accounts receivable, gross1||%||%||%||%||%|
Source: Based on data from CSX Corp. Annual Reports
1 Allowance as a percentage of accounts receivable, gross = 100 × Allowance for doubtful accounts ÷ Accounts receivable, gross
= 100 × ÷ = %
|Allowance as a percentage of accounts receivable, gross||Allowance for doubtful accounts divided by the gross accounts receivable.||CSX Corp.'s allowance as a percentage of accounts receivable, gross declined from 2015 to 2016 and from 2016 to 2017.|