What accounting standard did All County adopt, and what is its full name?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
,455 |
• 2029 $11,149 Total $49,225
NOTE 4: DATE OF MA1A*(M(17'6 REVIEW
The Company has evaluated subsequent events through the date of this report and has determined that there are no material subsequent events that require recognition or additional disclosure in these financial statements.
NOTE 5: CHANGE IN ACCOUNTING POLICY: ADOPTION OF ASC TOPIC 606
The Company adopted Topic 606 Revenue from Contracts with Customers with a date of initial application of January 1, 2020. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. The Company applied Topic 606 using the cumulative effect method ± i.e., by recognizing the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of equity at January 1, 2020. As stated in Note 2: Summary of Significant Accounting Policies, there was no material impact to any of the line items within the &oPpDn's Statements of Income or Balance Sheets as a result of applying ASC 606 for the fiscal year ended December 31, 2024.
Revenue Recognition and Adoption of ASC 606:
The Company adopted ASC 606 using the modified retrospective method for those contracts which were not substantially completed as of the transition date of January 01, 2020. There was no material impact to any of the line items within tKe &oPpDn's 6tDtePents of Income or Balance Sheets as a result of applying ASC 606 for the fiscal year ended December 31, 2024. Revenue from Contracts with Franchisee Revenue is recognized when control of the promised services is trDnsIerred to tKe &oPpDn's IrDnFKisees in Dn amount that reflects the consideration expected to be entitled to in exchange for those services.
Revenue from sales of individual franchises is recognized and earned for the initial non-recurring and non-refundable fee upon execution of the agreement with the franchisee whenever allowable under applicable state laws.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the company adopted ASC Topic 606, also known as "Revenue from Contracts with Customers," with an initial application date of January 1, 2020. This change in accounting policy affected how All County recognizes revenue.
All County applied Topic 606 using the cumulative effect method, which means the cumulative effect of applying the new standard was recognized as an adjustment to the opening balance of equity on January 1, 2020. However, the FDD states that the adoption of ASC 606 did not have a material impact on the company's Statements of Income or Balance Sheets for the fiscal year ended December 31, 2024.
Under ASC 606, All County recognizes revenue from contracts with franchisees when control of the promised services is transferred to the franchisees. This revenue recognition occurs in an amount that reflects the consideration All County expects to receive in exchange for those services. For individual franchise sales, revenue is recognized for the initial non-recurring and non-refundable fee upon the execution of the agreement with the franchisee, provided that all material services or conditions relating to the sale have been substantially performed or satisfied by All County, typically upon the opening of the franchise location.