Accounts Receivable, Net

9 Months Ended

Sep. 30, 2025

NOTE 2 – ACCOUNTS RECEIVABLE, NET

Accounts receivable, net, consist of the following:

	September 30,			December 31,
	2025			2024
Trade accounts receivable		294,514			13,819,322
Less: allowance for credit losses		(69,876	)		(13,587,182	)
Trade accounts receivable, net	$	224,638		$	232,140

Our allowance for credit losses estimate practice using the current expected credit loss method is that we consider accounts receivable balances aged within 180 days current, except for any individual uncollectible account assessed by management. We account for the following respective percentage as bad debt allowance based on age of the accounts receivables: 10% of accounts receivable that are between 180 days and 365 days old, 70% of accounts receivable that are between 365 days and 720 days old, and 100% of accounts receivable that are greater than 720 days old.

We recognize credit losses per actual write-offs as well as changes of allowance for credit losses. To the extent that our current allowance for credit losses is higher than that of the previous period, we recognize a credit loss for the difference during the current period, and when the current credit losses are lower than that of the previous period, we recognize a gain from the reversal of the allowance for credit losses for the difference. The allowance for credit losses balances were $0.070 million and $13.59 million as of September 30, 2025 and December 31, 2024, respectively. The changes in the allowances for credit losses during the three and nine months ended September 30, 2025 and 2024 were as follows:

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2025			2024			2025			2024
Balance, Beginning of Period	$	13,644,006		$	13,706,077		$	13,587,182		$	13,786,074
Credit losses (reversal of allowance for credit losses)		25,302			(1,656	)		26,011			4,754
Accounts charged to allowance for credit lossed		(13,702,032	)		-			(13,702,032	)		-
Foreign currency translation adjustment		102,600			231,222			158,715			144,815
Balance, End of Period	$	69,876		$	13,935,643		$	69,876		$	13,935,643

CHINA PHARMA HOLDINGS, INC. 10-Q