Did the implementation of ASC 326 have an impact on Bigfoot Forestry's financial statements?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments. ASU 2016-13, along with subsequent clarifications and improvements (collectively, ASC 326), replaces the incurred loss impairment methodology in prior U.S. GAAP with a methodology that instead reflects a current estimate of all expected credit losses on financial assets, including receivables. ASC 326 requires that the Company measure and recognize expected credit losses at the time the asset is recorded, while considering a broader range of information to estimate credit losses including country specific macroeconomic conditions that correlate with historical loss experience, delinquency trends and aging behavior of receivables, among others. ASC 326 is effective for the Company beginning January 1, 2023. There was no impact on the Company's financial statements as a result of the implementation of this standard.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, the implementation of ASC 326 did not have an impact on the company's financial statements. The FDD states that ASC 326, which addresses the measurement of credit losses on financial instruments, became effective for Bigfoot Forestry beginning January 1, 2023.
ASC 326 requires companies to measure and recognize expected credit losses at the time an asset is recorded, considering a range of information to estimate these losses. This includes macroeconomic conditions, delinquency trends, and the aging behavior of receivables.
However, the 2025 FDD explicitly states that the implementation of this standard had no impact on Bigfoot Forestry's financial statements. This suggests that Bigfoot Forestry either had minimal credit losses or was already accounting for potential losses in a manner consistent with the new standard.