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At December 31, 2025, Sorrento Inc. estimated bad debts as 3% of the outstanding balance of Accounts Receivable. At December 31, 2026, Sorrento determined that

At December 31, 2025, Sorrento Inc. estimated bad debts as 3% of the outstanding balance of Accounts Receivable. At December 31, 2026, Sorrento determined that it should increase its estimate to 6.5%. This change is handled on a O cumulative basis. retrospective basis. prospective basis. O speculative basis

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