What accounting standard update (ASU) did Budget adopt on January 1, 2025, and what is its primary focus?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
On January 1, 2025, as the result of a new accounting pronouncement, we adopted ASU 2023-09, "Improvements to income Tax Disclosures," which amends Topic 740 primarily through enhanced income tax disclosures, improving transparency into the factors affecting income tax expense. We expect to include certain additional income tax disclosures in the notes to our Consolidated Financial Statements as a result of the adoption of this accounting pronouncement.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, on January 1, 2025, Budget adopted ASU 2023-09, "Improvements to income Tax Disclosures," which amends Topic 740. The primary focus of this update is to enhance income tax disclosures, thereby improving transparency into the factors that affect income tax expense.
Budget anticipates including additional income tax disclosures in the notes to its Consolidated Financial Statements as a direct result of adopting this new accounting pronouncement. For a prospective franchisee, this means that Budget is committed to providing more detailed and transparent information regarding its income tax practices in its financial reporting.
This adoption reflects Budget's adherence to current accounting standards and its efforts to provide stakeholders, including potential franchisees, with a clearer understanding of its financial position and tax-related matters. Franchisees can expect to see these enhanced disclosures in future financial statements, allowing for a more informed assessment of Budget's financial performance and tax obligations.