What accounting standard does Bonchon use to evaluate subsequent events?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Bonchon Franchise, LLC's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the company's management is responsible for preparing and presenting financial statements according to accounting principles generally accepted in the United States of America. As part of this responsibility, management must evaluate whether any conditions or events, when considered together, raise doubts about Bonchon's ability to continue as a going concern within one year after the financial statements are issued.
This evaluation is a standard accounting practice, ensuring that the financial statements provide an accurate and reliable view of Bonchon's financial health. It involves assessing various factors that could impact the company's ability to operate in the foreseeable future.
For a prospective franchisee, this indicates that Bonchon's financial statements are prepared under a recognized and consistent framework. It also suggests that the company's management and auditors are diligent in assessing the company's financial stability and future prospects, which can provide a level of comfort to potential investors.