Allowance For Doubtful Accounts Disclosures Allowance for Doubtful Accounts

3 Months Ended

Mar. 28, 2020

Allowance For Doubtful Accounts Disclosures [Text Block]

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information. Collections and payments from customers are continuously monitored. The Company evaluates the collectability of its accounts receivable and determines

the appropriate allowance for doubtful accounts based on a combination of factors. The Company maintains an allowance for doubtful accounts, which is based upon historical experience as well as specific customer collection issues that have been identified. The Company uses specific criteria to determine uncollectible receivables to be written off, including bankruptcy, accounts referred to outside parties for collection, and accounts past due primarily over specified periods.

Recent Events

In March 2020, the World Health Organization characterized a novel strain of coronavirus (“COVID-19”) as a pandemic amidst a rising number of confirmed cases and thousands of deaths worldwide. As of December 28, 2019, the outbreak of COVID-19 had not had a significant impact on our business. However, more recently, our business has been significantly impacted. In recent weeks, many countries, including the United States, have taken steps to restrict travel, temporarily close businesses, schools and other public gathering spaces and almost all states in the United States have issued orders and directives requiring everyone to stay in their homes. It remains unclear how long such measures will remain in place and when the COVID-19 pandemic will abate. Since mid-March 2020, the operations of our restaurant, hospitality and education customers (and our operations that are dependent upon these customers) have been significantly disrupted by the spread of COVID-19 and the corresponding sudden and significant decline in consumer demand for food prepared away from home. Due to the impact that the COVID-19 pandemic is having our customers, particularly our restaurant and hospitality customers, we increased our allowance for doubtful accounts to reflect the increased collection risk associated with our customer base.

A summary of the activity in the allowance for doubtful accounts for the 13 weeks ended March 28, 2020 was as follows:



Balance as of December 28, 2019	$	30
Charged to costs and expenses	180
Adoption of ASU 2016-13	1
Customer accounts written off—net of recoveries	(13		)
Balance as of March 28, 2020	$	198

This table excludes the vendor receivable related allowance for doubtful accounts of $5 million and $4 million as of March 28, 2020 and December 28, 2019, respectively.