What accounting standard does Advanced Mobile Iv And Amiv use for leases?
Advanced_Mobile_Iv_And_Amiv Franchise · 2023 FDDAnswer from 2023 FDD Document
5 | $2,250 | | 4-6 | 30 | $4,500 | | 7-12 | 60 | $9,000 | | 13-24 | 200 | $30,000 | | 25-36 | 400 | $60,000 | | 37-48 | 500 | $75,000 | | After 48 Months: | 600 | $90,000 | | Annual Minimum | | |
NOTES TO THE FINANCIAL STATEMENTS December 31, 2022
(1) Nature of Business and Summary of Significant Accounting Policies
(a) Nature of Business
Advanced Mobile IV, LLC (the "Company") was formed on November 3, 2021 in the state of Utah as a Limited Liability Company for the principle purpose of conducting franchise sales, marketing, and management of the Advanced Mobile IV franchise system. The Company began substantive operations during the year ended December 31, 2022.
The Company uses the accrual basis of accounting, and its accounting period is the 12-month period ending December 31 of each year.
(b) Accounting Standards Codification
The Financial Accounting Standards Board ("FASB") has issued the FASB Accounting Standards Codification ("ASC") that became the single official source of authoritative U.S. generally accepted accounting principles ("GAAP"), other than guidance issued by the Securities and Exchange Commission ("SEC"), superseding existing FASB, American Institute of Certified Public Accountants, emerging Issues Task Force and related literature. All other literature is not considered authoritative. The ASC does not change GAAP; it introduces a new structure that is organized in an accessible online research system.
(c) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.
Source: Item 23 — RECEIPTS (FDD pages 54–202)
What This Means (2023 FDD)
According to the 2023 Franchise Disclosure Document, Advanced Mobile IV, LLC's accounting policies are detailed in the notes to the financial statements. However, the specific accounting standard used for leases is not disclosed in the provided excerpts. While the notes cover various aspects such as the nature of the business, the use of estimates, cash and cash equivalents, and the application of U.S. Generally Accepted Accounting Principles (GAAP) through the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), there is no mention of the accounting standard used for leases.
For a prospective franchisee, understanding the lease accounting standard is crucial, especially if the franchisee plans to lease property or equipment. Different accounting standards can have a significant impact on the financial statements, affecting how assets and liabilities are reported. Knowing whether Advanced Mobile Iv And Amiv follows a specific standard like ASC 842, which governs lease accounting under GAAP, would provide clarity on how leases are treated in the company's financial reporting.
To gain a comprehensive understanding, a potential Advanced Mobile Iv And Amiv franchisee should directly ask the franchisor about the specific accounting standard used for leases. This inquiry should also extend to understanding the implications of these standards on the franchisee's financial obligations and reporting requirements. Additionally, it would be beneficial to consult with a financial advisor or accountant to fully assess the financial impact of lease accounting on their franchise operations.