As of December 31, 2023 and December 31, 2022, how do the carrying amounts of Aira Fitness' financial assets and liabilities relate to their fair value?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
or the purpose of offering franchise opportunities to entrepreneurs who want to own their own 'AIRA FITNESS' location, as a franchise.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). As a result, the Company records revenue when earned and expenses when incurred. The Company has adopted the calendar year as its basis of reporting.
Use of Estimates
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosures of contingent assets and liabilities and other items, as well as the repo
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 Aira Fitness Franchise Disclosure Document, there is no explicit disclosure regarding the relationship between the carrying amounts of Aira Fitness' financial assets and liabilities and their fair value as of December 31, 2023, and December 31, 2022. The provided excerpts include the company's balance sheets, profit and loss statements, cash flow statements, statements of shareholder equity, and significant accounting policies, but do not contain specific details on how the carrying amounts of assets and liabilities align with their fair market value.
However, the notes to the financial statements do provide some context. Note B, "Summary of Significant Accounting Policies," discusses the use of estimates in preparing financial statements, which could indirectly affect how assets and liabilities are valued. It mentions that management makes estimates and assumptions that impact the reported amounts of assets and liabilities. Note C, "Concentrations of Risk," mentions that the company's financial instruments that could pose a credit risk consist of cash and cash equivalents, which are placed with high-quality financial institutions and do not exceed insured amounts.
To gain a comprehensive understanding of how Aira Fitness determines the fair value of its financial assets and liabilities, a prospective franchisee should ask the franchisor for detailed information on the valuation methods used and any differences between carrying amounts and fair values. Understanding these accounting practices is crucial for assessing the company's financial health and stability.