Are the Bang Cookies financial statements presented according to GAAP?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
erritory. The Company's parent is Bang Cookies Corporation, a Delaware corporation established on August 10, 2017. This company has not in the past and does not now offer franchises in any lines of business.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of financial statements.
A. Basis of Accounting
The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").
B. Cash and Cash Equivalents
For purposes of the Statement of cash flows, cash equivalents include bank accounts and cash in transit for bank deposits with maturities of three months or less to be cash equivalents.
C. Federal Income Taxes
The Company is organized as a limited liability company and is a disregarded entity for income tax purposes. The Company's accounts are included in the tax return of its members, and all taxes are assessed and paid at the individual member level. Therefore, no income tax liability for federal or state taxes has been recorded in the financial statement.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 55–56)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). This indicates that Bang Cookies adheres to a standardized set of accounting rules and guidelines when preparing its financial statements. These principles ensure transparency and consistency, making it easier for potential franchisees and other stakeholders to understand and compare Bang Cookies' financial performance with other companies.
The FDD states that these accounting policies have been consistently applied in the preparation of the financial statements. Consistent application of GAAP enhances the reliability and comparability of the financial statements over different reporting periods. This consistency is crucial for assessing Bang Cookies' financial trends and performance over time.
Furthermore, the independent auditor's report included in the FDD expresses an opinion that the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of Bang Cookies in accordance with GAAP. This opinion from a certified public accountant (CPA) provides an additional level of assurance to prospective franchisees that the financial statements are reliable and fairly represent the company's financial condition.