What was the amount of deferred revenue for Buona in 2023?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
ed during the audit.
Adoption of New Accounting Principle
As more fully described in Note 10 to the financial statements, as of January 2, 2023, the Company adopted a new accounting principle that prescribes the recognition, measurement, presentation, and disclosure requirements related to the allowance for credit losses.
R.J. Augustine & Associates, Ltd.
CERTIFIED PUBLIC ACCOUNTANTS
April 19, 2024
CHICAGO'S ORIGINAL ITALIAN BEEF FRANCHISING LLC DECEMBER 31, 2023 AND JANUARY 1, 2023 BALANCE SHEETS
ASSETS
| 2023 | 2022 | |
|---|---|---|
| CURRENT ASSETS Cash Prepaid Insurance | $ 251,155 8,075 | $ 102,820 7,998 |
| TOTAL CURRENT ASSETS | 259,230 | 110,818 |
| TOTAL ASSETS | $ 259,230 | $ 110,818 |
| LIABILITIES AND MEMBERS' EQUITY (DEFICIT) | ||
| 2023 | 2022 | |
| CURRENT LIABILITIES Current Portion of Deferred Revenue Accounts Payable Accrued Accounts Payable Due to Affiliate Deposits - Training Fees | $ 11,000 6,192 360 122 |
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the company's deferred revenue is divided into current and long-term liabilities. The current portion of deferred revenue for 2023 was $11,000, while the long-term portion was $211,917. Therefore, the total deferred revenue for Buona in 2023, combining both current and long-term liabilities, was $222,917.
Deferred revenue typically represents payments Buona has received for goods or services that have not yet been provided. In this case, it includes advance consideration from franchise owners and deposits for training fees. The current portion represents revenue expected to be recognized within the next year, while the long-term portion is for periods beyond one year.
For a prospective Buona franchisee, understanding deferred revenue is crucial because it reflects the company's obligations to provide future services. The figures indicate the financial health and stability of Buona, showing how much revenue is secured for future performance. Monitoring these liabilities can provide insights into Buona's operational commitments and potential future revenue streams.