What accounting standard allowed Bumble Roofing to change its policy regarding income taxes?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
mber 30, 2024, 2023, and 2022, respectively.
NOTE 10 – CHANGE IN ACCOUNTING POLICY
During 2024, the Company has opted to no longer record an allocation for BCAT's provision or credit for income taxes, as allowed by Accounting Standards Codification 740, Income Taxes. This change has been applied retrospectively. As a result, the Company has restated its comparative consolidated financial statements to reflect the new policy. The effect of this accounting polic
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the company opted to change its policy regarding income taxes during 2024. This change was permitted by Accounting Standards Codification 740, Income Taxes. As a result, Bumble Roofing no longer records an allocation for BCAT's (MidOcean BCAT Holdings, Inc.) provision or credit for income taxes.
This change in accounting policy was applied retrospectively, meaning that Bumble Roofing restated its comparative consolidated financial statements to reflect the new policy. The effect of this change resulted in an increase to member's equity as of September 31, 2021, of $26,757.
Note 10 of the consolidated financial statements provides further details on this change. The rationale behind this change is that it better reflects the specific tax position of Bumble Roofing. This adjustment does not modify the opinion expressed in the financial statements.