What is required of All States M.E.D.'s management when making financial estimates?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about All States M.E.D. Franchising, LLC.'s ability to continue as a going concern for the period ended December 31, 2023.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, management is responsible for the preparation and fair presentation of the company's financial statements in accordance with accounting principles generally accepted in the United States of America. This includes designing, implementing, and maintaining internal controls relevant to ensure the financial statements are free from material misstatement, whether due to fraud or error.
Specifically, when preparing financial statements, All States M.E.D.'s management must evaluate whether there are conditions or events that, when considered in total, raise substantial doubt about the company's ability to continue as a going concern through December 31, 2023. This assessment is a critical part of ensuring the accuracy and reliability of the financial statements.
Furthermore, the company's accounting policies, such as the method of accounting (accrual basis) and depreciation methods (straight-line over 5 years for book purposes, accelerated methods for tax), must be appropriate. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized, while expenditures for maintenance and repairs are expensed as incurred.