What accounting standard update did Best Brains adopt, and when did they implement it?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
At December 31, 2024, Best Brains Inc. did not have any tax benefit disallowed under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") FASB ASC 740, Income Taxes, and no amounts have been recognized for potential interests and penalties. A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a
tax examination, with the tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the company addresses its adherence to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740, concerning income taxes. Specifically, Best Brains states that at December 31, 2024, they had no tax benefits disallowed under this standard.
Best Brains only recognizes a tax position as a benefit if it is more likely than not to be sustained during a tax examination. The recognized amount is the largest tax benefit with a greater than 50% likelihood of being realized upon examination. For any tax positions failing this "more likely than not" test, Best Brains does not record a tax benefit.
This indicates that Best Brains is actively monitoring and complying with current accounting standards related to income taxes. For a prospective franchisee, this suggests that the franchisor is diligent in its financial reporting and tax practices, which can provide a level of confidence in the financial stability and transparency of the company.