What is Budget currently evaluating regarding the adoption of the accounting pronouncement ASU 2024-03?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses," which amends Topic 220 primarily through requiring disclosures, in the notes to financial statements, about certain costs and expenses. The amendments are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted on a prospective or retrospective basis. ASU 2024-03 becomes effective for us on January 1, 2027. We are currently evaluating the impact of the adoption of this accounting prenouncement on our Consolidated Financial Statements.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget is currently evaluating the impact of adopting ASU 2024-03, "Disaggregation of Income Statement Expenses," on its Consolidated Financial Statements. This accounting pronouncement, issued by the FASB in November 2024, amends Topic 220 and primarily requires disclosures in the notes to financial statements about certain costs and expenses.
The amendments introduced by ASU 2024-03 will become effective for Budget on January 1, 2027. The pronouncement is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted on either a prospective or retrospective basis.
For a prospective Budget franchisee, this means that Budget is assessing how these new disclosure requirements will affect the way its financial statements are presented. While the pronouncement primarily impacts the presentation of financial information rather than the underlying financial results, it could lead to increased transparency regarding Budget's expenses. Franchisees may want to monitor how Budget implements these changes, as they could provide additional insights into the company's cost structure and financial performance.