In the context of Aerus' financial reporting, who is responsible for making estimates and assumptions?

According to Aerus's 2025 Franchise Disclosure Document, the company's management is responsible for making estimates and assumptions that affect the reported amounts and disclosures in its financial statements. This responsibility is part of preparing financial statements in conformity with accounting principles generally accepted in the United States of America. These estimates and assumptions can influence the reported figures in the financial statements. Therefore, the actual financial results could differ from these initial estimates.

This means that prospective Aerus franchisees should recognize that the financial statements they review contain elements of judgment and prediction made by the company's management. These estimates cover a range of items, such as the valuation of assets and liabilities, revenue recognition, and potential liabilities from ongoing legal issues. While these estimates are made in good faith, they inherently carry a degree of uncertainty.

For a potential franchisee, understanding that management makes these estimates is crucial because it highlights the possibility of variability in Aerus's financial performance. It is advisable to consider the potential impact of these estimates when evaluating the financial health and stability of the franchise. Furthermore, franchisees might want to inquire about the specific types of estimates that have the most significant impact on the financial statements and how Aerus manages the risks associated with these estimates. This insight can provide a more comprehensive understanding of the financial information presented.