For Batteries Plus Bulbs' foreign subsidiaries, how are assets and liabilities translated?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
Batteries Plus provides franchisees with a system of business training, site location, marketing, advertising programs and management support designed to assist the franchisee in opening and operating a Batteries Plus store.
Ascent operates a supply chain which purchases, warehouses and distributes inventory for the Batteries Plus owned and franchised stores.
Hong Kong and Shenzhen are utilized by Ascent and Batteries Plus to source inventory.
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the provided excerpts do not contain information regarding the specific methods Batteries Plus Bulbs uses to translate the assets and liabilities of its foreign subsidiaries, Hong Kong and Shenzhen, for financial reporting purposes. The excerpts do confirm that Batteries Plus Bulbs has foreign subsidiaries, Batteries Plus Hong Kong Limited and Batteries Plus Shenzhen Co. These subsidiaries are utilized by Ascent and Batteries Plus Bulbs to source inventory.
Without specific details in the FDD, it's unclear what exchange rates are used, how gains or losses from translation are treated, or whether any specific accounting standards are followed for foreign currency translation. This information is crucial for understanding the potential financial impact of these foreign operations on the consolidated financial statements of Batteries Plus Bulbs.
A prospective franchisee should directly ask Batteries Plus Bulbs for detailed information on their foreign currency translation policies. Specifically, they should inquire about the accounting standards followed (e.g., U.S. GAAP or IFRS), the exchange rates used for translation, and the treatment of any translation gains or losses. Understanding these policies is essential for assessing the financial risks and opportunities associated with Batteries Plus Bulbs' international operations.