What rule dictates the financial statement requirements for All States M.E.D.?

According to All States M.E.D.'s 2024 Franchise Disclosure Document, the company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP). This is explicitly stated in the notes to the financial statements. Specifically, assets, liabilities, revenue, and expenses are recognized on the accrual basis of accounting.

GAAP provides a common set of accounting principles, standards, and procedures that companies use to compile their financial statements. These standards ensure that the financial statements are presented fairly and consistently, allowing for meaningful comparisons between different companies and across different time periods. For a prospective All States M.E.D. franchisee, this means that the financial information provided by the franchisor should adhere to a consistent and well-understood framework.

The FDD also mentions that the auditors of All States M.E.D. conduct their audit in accordance with auditing standards generally accepted in the United States of America (GAAS). GAAS are the standards against which auditors measure the quality of their audit. An audit conducted under GAAS aims to provide reasonable assurance that the financial statements are free from material misstatement. This further supports the reliability and credibility of the financial statements presented in the FDD.

In summary, All States M.E.D. adheres to GAAP for preparing its financial statements and is audited under GAAS, both of which are standard practices that promote transparency and reliability in financial reporting. This framework helps potential franchisees to better understand and assess the financial health and performance of All States M.E.D.