What accounting principles must be used for Bor Restoration financial statements?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
The monthly, quarterly, and yearly financial statements must be prepared using generally accepted accounting principles and must be based on accounting's accrual method.
All bookkeeping and accounting must be completed by an employee, independent contractor, bookkeeper, accountant, or certified public accountant who is not you or a family member.
You must provide us with reasonable proof at the end of each calendar year that your bookkeeping and accounting have met these requirements.
- i.
All financial statements must be accompanied by a statement certified under penalty of perjury from the employee, independent contractor, bookkeeper, accountant, or certified public accountant that the documents are true and accurate.
- j.
If you fail to deliver any records required under this Franchise Agreement in a timely manner, we have the right to collect the then-current Report Late Fee for each separate late report in addition to any other rights we may have.
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, franchisees must prepare their financial statements using generally accepted accounting principles (GAAP) and the accrual method of accounting. This requirement applies to the monthly, quarterly, and yearly financial statements that franchisees are obligated to provide to Bor Restoration. These financial statements include a profit and loss statement and a balance sheet.
Bor Restoration mandates that all bookkeeping and accounting tasks be performed by a qualified professional who is not the franchisee or a family member. This can be an employee, independent contractor, bookkeeper, accountant, or certified public accountant. Franchisees must also provide proof that their bookkeeping and accounting practices meet these requirements at the end of each calendar year.
To ensure accuracy and compliance, Bor Restoration requires that all financial statements be accompanied by a statement certified under penalty of perjury. This statement must be provided by the individual or firm responsible for the bookkeeping and accounting, attesting that the documents are true and accurate. Failure to deliver the required records in a timely manner may result in a Report Late Fee for each late report, in addition to any other rights Bor Restoration may have.
These stringent requirements ensure that Bor Restoration receives accurate and reliable financial information from its franchisees, allowing for effective monitoring and management of the franchise system. For prospective franchisees, this means budgeting for professional accounting services and adhering to strict reporting deadlines to avoid penalties.