What accounting standard does Beehive Homes use to address uncertainty in income taxes?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
The accounting standard on accounting for uncertainty in income taxes addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under that guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement.
There were no unrecognized tax benefits identified or recorded as liabilities for fiscal years 2024, 2023 or 2022.
The Company files income and franchise taxes in the U.S. federal jurisdiction and in all states in which it operates. The Company is generally no longer subject to examination by the Internal Revenue Service for years before 2021.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the company adheres to specific accounting standards when dealing with uncertainty in income taxes. The accounting standard on accounting for uncertainty in income taxes addresses whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Beehive Homes will only recognize a tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained if examined by taxing authorities, based on the technical merits of the position.
For tax benefits recognized in the financial statements, Beehive Homes measures them based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. This means that the company takes a conservative approach, only recognizing benefits that are more probable than not to be upheld and then only to the extent that they are likely to be realized.
The FDD states that for the fiscal years 2024, 2023, and 2022, there were no unrecognized tax benefits identified or recorded as liabilities. Additionally, Beehive Homes is generally no longer subject to examination by the Internal Revenue Service for years before 2021. This provides some assurance that the company's tax positions have been settled for those earlier years. Beehive Homes files income and franchise taxes in the U.S. federal jurisdiction and in all states in which it operates.