When does ASU No. 2023-09 become effective for Belocal's annual periods?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures". The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. ASU 2023-09 will be effective for annual periods beginning after December 15, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU No. 2023-09 on its financial statements.
Source: Item 23 — RECEIPTS (FDD pages 71–242)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Accounting Standards Update (ASU) No. 2023-09, which pertains to improvements in income tax disclosures, will be effective for annual periods beginning after December 15, 2025. This standard requires more detailed information about a company's effective tax rate reconciliation and income taxes paid, aiming to provide investors with useful insights for capital allocation decisions. The standard applies to all entities subject to income taxes.
Belocal has the option to apply ASU No. 2023-09 prospectively or retrospectively, and early adoption is permitted. As of the issuance of the FDD, Belocal is evaluating the impact of adopting ASU No. 2023-09 on its financial statements. This means that Belocal is still in the process of determining how this new accounting standard will affect its financial reporting and what changes, if any, will be required.
For a prospective Belocal franchisee, this information is relevant because it provides insight into how Belocal is adapting to changes in accounting standards and striving for greater transparency in its financial reporting. While the direct impact on franchisees may be limited, understanding how Belocal manages its financial reporting can contribute to a more informed assessment of the franchise's overall stability and compliance practices. Franchisees may want to inquire about the outcome of Belocal's evaluation of ASU No. 2023-09 and any potential implications for the franchise system.