On what basis of accounting are Big Blue Swim School's financial statements prepared?

According to Big Blue Swim School's 2025 Franchise Disclosure Document, the company prepares its financial statements using the accrual basis of accounting. This method adheres to accounting principles generally accepted in the United States of America (U.S. GAAP). This means that revenues are recognized when earned and expenses are recognized when incurred, regardless of when cash changes hands.

The accrual method provides a more accurate picture of a company's financial performance over a period of time compared to the cash basis method, which recognizes revenues and expenses only when cash is received or paid. The use of U.S. GAAP ensures that Big Blue Swim School's financial statements are presented fairly and consistently, allowing for meaningful comparisons with other companies.

For a prospective franchisee, understanding that Big Blue Swim School uses accrual accounting and U.S. GAAP is important for interpreting the financial statements provided in the FDD. It means that the financial data reflects the underlying economic activity of the company, not just its cash flow. This can help franchisees make informed decisions about the financial health and performance of the franchise system.