How did Baya Bar account for advertising costs in 2021, 2022, and 2023?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
ze or continue to recognize tax positions that meet a "more likely than not" threshold upon examination by taxing authorities.
Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes (continued)
requiring recognition in its financial statemen
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the company expenses advertising costs as they are incurred. The advertising expenses for the years ending December 31, 2023, 2022, and 2021 were $16,363, $40,598, and $0, respectively.
This means that Baya Bar recognizes advertising costs on its income statement in the same period that they spend the money. This is a common accounting practice, especially for smaller businesses, as it provides a straightforward way to match expenses with revenues.
For a prospective franchisee, this information is relevant because it provides insight into how Baya Bar manages and reports its finances. The relatively low advertising expenses in 2021 and 2023, and the higher expense in 2022, could indicate fluctuations in marketing strategies or priorities. A potential franchisee might want to inquire about the specific advertising activities undertaken in each of these years to better understand the company's approach to marketing and promotion.