When did Bw Premier Collection adopt ASC 842?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
On December 1, 2022, the Company adopted ASU 2016-02, "Leases (Topic 842)," using the modified retrospective approach. This pronouncement requires lessees to recognize a lease liability and a right-of-use asset for each lease with a term longer than twelve months and adds new presentation and disclosure requirements for both lessees and lessors. The recognized liability is measured at the present value of lease payments not yet paid, and the corresponding asset represents the lessee's right to use the underlying asset over the lease term and is based on the liability, subject to certain adjustments. For purposes of the the consolidated financial statements, the standard retains the dual model with leases classified as either operating or finance leases. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. The accounting guidance for lessors remains largely unchanged.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the company adopted ASU 2016-02, "Leases (Topic 842)," effective December 1, 2022, using the modified retrospective approach. This accounting standards update requires lessees to recognize a lease liability and a right-of-use asset for leases with terms longer than twelve months. It also introduces new presentation and disclosure requirements for both lessees and lessors. The liability is measured at the present value of lease payments not yet paid, while the asset represents the lessee's right to use the underlying asset over the lease term and is based on the liability, subject to certain adjustments.
For the consolidated financial statements, the standard retains the dual model, classifying leases as either operating or finance leases. Operating leases will result in straight-line expense, whereas finance leases will result in a front-loaded expense pattern. The accounting guidance for lessors remains largely unchanged.
This adoption means that Bw Premier Collection's financial statements for periods after December 1, 2022, will reflect these changes in lease accounting. For a prospective franchisee, this information is relevant because it provides insight into how Bw Premier Collection accounts for its leases, which can affect its financial reporting and potentially influence decisions related to leasing property or equipment.