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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
Accounts receivable primarily consist of amounts due from credit card companies from the sale of passenger airline tickets, customers of Delta's aircraft maintenance and cargo transportation services and other companies for the purchase of mileage credits under the frequent flyer program (the "SkyMiles program"). Delta provides an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical chargebacks, write-offs, bankruptcies and other specific analyses. Bad debt expense was not material in any period presented.
Source: 10-K (filing date: 2018-02-23).
Allowance for Doubtful Accounts Receivable
|Dec 31, 2017||Dec 31, 2016||Dec 31, 2015||Dec 31, 2014||Dec 31, 2013|
|Selected Financial Data (USD $ in millions)|
|Allowance for uncollectible accounts|
|Accounts receivable, gross|
|Allowance as a percentage of accounts receivable, gross1|
1 Allowance as a percentage of accounts receivable, gross = 100 × Allowance for uncollectible accounts ÷ Accounts receivable, gross
= 100 × ÷ =
|Allowance as a percentage of accounts receivable, gross||Allowance for doubtful accounts divided by the gross accounts receivable.||Delta Air Lines Inc.'s allowance as a percentage of accounts receivable, gross increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level.|