What were the contract assets, included within accounts receivable, for Brightstar Care as of January 1, 2023?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
or the years ended December 31, 2023 and January 1, 2023, respectively, and is included within the consolidated statements of income.
Contract assets include accrued revenue for items not invoiced as of period end due to billing occurring subsequent to the performance obligation being fulfilled. Contract assets were $1,572,320 and $1,881,050 as of December 31, 2023 and January 1, 2023, respective
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 117)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, contract assets, which are included within accounts receivable, represent accrued revenue for items not yet invoiced at the end of a period because billing occurs after the performance obligation is fulfilled. As of January 1, 2023, Brightstar Care's contract assets were valued at $1,881,050.
For a prospective Brightstar Care franchisee, this figure indicates the amount of revenue that Brightstar Care had earned but not yet billed to clients as of that date. This can be an important metric for understanding the company's revenue recognition practices and its cash flow management.
It's also worth noting that the FDD mentions contract liabilities, which are initial franchise fees received upfront. However, these liabilities were considered immaterial as of both December 31, 2023, and January 1, 2023, meaning they did not have a significant impact on the company's financial position.