Does the preparation of C12 Group's financial statements require management to make estimates and assumptions?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Use of Estimates: The preparation of financial statements in conformity with U. S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the preparation of their financial statements requires management to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting year. This is a standard accounting practice. However, the FDD notes that actual results could differ from these estimates.
For a prospective franchisee, this means that the financial statements provided in the FDD, while audited, rely on certain judgments made by C12 Group's management. These judgments can affect how the company's financial performance and position are presented. It is important to understand that these are estimates, and the actual financial outcomes could vary.
As a potential franchisee, it would be prudent to discuss these key estimates and assumptions with C12 Group's management or current franchisees to understand how they might impact the business's financial performance. Understanding the nature of these estimates can provide a more informed perspective on the financial health and stability of C12 Group.