What was the total amount of deferred revenue (non-current) for Bombs Away?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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BOMBS AWAY FRANCHISING LLC BALANCE SHEET DECEMBER 31, 2023
| ASSETS | ||
|---|---|---|
| CURRENT ASSETS | ||
| Cash and Cash Equivalents | $ 5,000 | |
| Accounts Receivable | 515 | |
| TOTAL CURRENT ASSETS | 5,515 | |
| NON-CURRENT ASSETS | ||
| TOTAL NON-CURRENT ASSETS | - | |
| TOTAL ASSETS LIABILITIES AND OWNER'S EQUITY | 5,515 | |
| CURRENT LIABILITIES | ||
| Deferred Revenue (current) | 9,000 | |
| TOTAL CURRENT LIABILITIES | 9,000 | |
| NON-CURRENT LIABILITIES | ||
| Deferred Revenue | 6,000 | |
| Due to Related Party | 59,397 | |
| TOTAL NON-CURRENT LIABILITIES | 65,397 | |
| TOTAL LIABILITIES | 74,397 | |
| OWNER'S EQUITY | ||
| Retained Earnings | (41,721) | |
| Net Income (Loss) | (27,161) | |
| TOTAL SHAREHOLDERS |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the company's balance sheet as of December 31, 2022, lists non-current deferred revenue. Deferred revenue represents payments Bombs Away has received for services or products that will be delivered in the future. Because Bombs Away has not yet provided the services or products, the revenue is 'deferred' and recorded as a liability on the balance sheet. As the services are provided or products delivered over time, Bombs Away will recognize the revenue.
For Bombs Away, the total amount of non-current deferred revenue is $6,000. This means that Bombs Away has collected $6,000 for services or products that will be provided beyond the next 12 months from the balance sheet date.
This deferred revenue could relate to franchise fees or other services that Bombs Away will provide to its franchisees over an extended period. For a prospective Bombs Away franchisee, this indicates that a portion of the fees they pay to Bombs Away are recognized by Bombs Away over time as services are rendered, which is a common accounting practice in franchising.