Are the Belocal financial statements prepared according to GAAP?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company uses the accrual basis of accounting in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Under this method, revenue is recognized when earned and expenses are recognized as incurred.
We have audited the financial statements of N2 Franchising, Inc. (the "Company"), which comprise the balance sheets as of June 30, 2025 and 2024, and the related statements of operations, changes in stockholders' equity and cash flows for the years ended June 30, 2025, 2024 and 2023, and related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of N2 Franchising, Inc. as of June 30, 2025 and 2024 and the results of its operations, changes in stockholders' equity and cash flows for the years ended June 30, 2025, 2024 and 2023 in accordance with accounting principles generally accepted in the United States of America.
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 70–71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the company's financial statements are prepared in accordance with accounting principles generally accepted in the United States. Specifically, Belocal uses the accrual basis of accounting, a standard U.S. GAAP method where revenue is recognized when earned and expenses when incurred.
Furthermore, the independent auditor's report states that the financial statements of N2 Franchising, Inc. (referred to as "the Company") as of June 30, 2025 and 2024, along with related statements, present fairly the company's financial position, results of operations, changes in equity, and cash flows for the years ending June 30, 2025, 2024, and 2023. This presentation is, in all material respects, in accordance with accounting principles generally accepted in the United States of America.
An audit conducted following generally accepted auditing standards (GAAS) aims to provide reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. Management is responsible for preparing these statements fairly and maintaining internal controls relevant to this preparation.