Does the FDD disclose any significant accounting policies that are relevant to understanding the Consolidated Statements of Cash Flows for Budget?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
of such assets and the principal debt repayment or financing of such assets are classified as activities of our vehicle programs. We believe it is appropriate to segregate the financial data of our vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of our Company and all entities in which we have a direct or indirect controlling financial interest and variable interest entities for which we have determined we are the primary beneficiary. We consolidate joint venture activities when we have a controlling interest and record non-controlling interests within stockholders' equity and the statement of comprehensive income equal to the percentage of ownership interest retained in such entities by the respective non-controlling party. Intercompany transactions have been eliminated in consolidation.
The use of estimates and assumptions as determined by management is required in the preparation of the Consolidated Financial Statements in conformity with GAAP. These estimates are based on management's evaluation of historical trends and other information available when the Consolidated Financial Statements are prepared and may affect the amounts reported and related disclosures. Actual results could differ from those estimates.
Revenue Recognition
We derive revenues primarily by providing vehicle rentals and other related products and mobility services to commercial and leisure customers, as well as through licensing of our rental brands. Other related products and mobility services include sales of collision and loss damage waivers, under which we agree to relieve a customer from financial responsibility arising from vehicle damage incurred during the rental;
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the notes to the consolidated financial statements include a summary of significant accounting policies. These policies are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These principles are used for Budget and all entities in which Budget has a direct or indirect controlling financial interest. Intercompany transactions are eliminated during consolidation.
The use of estimates and assumptions determined by management is required in the preparation of the Consolidated Financial Statements in conformity with GAAP. These estimates are based on management's evaluation of historical trends and other information available when the Consolidated Financial Statements are prepared and may affect the amounts reported and related disclosures. Actual results could differ from those estimates.
For the years ended December 31, 2023 and 2022, Budget reclassified certain items within operating activities on the Consolidated Statements of Cash Flows to conform to the current year presentation. These reclassifications had no impact on reported net cash provided by operating activities. Also, on January 1, 2024, Budget adopted ASU 2023-07, "Improvements to Reportable Segment Disclosures," which amends Topic 280 primarily through enhanced disclosures about significant segment expenses. The adoption of this accounting pronouncement has resulted in incremental disclosures within the notes to Budget's Consolidated Financial Statements.