What does the preparation of financial statements require management to do regarding estimates and assumptions for C12 Group?
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 the 2025 C12 Group FDD, the preparation of financial statements requires that the company's management make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements. They also impact the reported amounts of revenues and expenses during the reporting year.
Because these are only estimates, the actual results for C12 Group could differ from what was initially estimated. This is a standard accounting practice, as financial statements often rely on predictions and assumptions about future events.
Prospective franchisees should be aware that these estimates can influence the financial picture presented in the FDD. While the financial statements are audited, the auditor also evaluates the reasonableness of significant accounting estimates made by management. Franchisees should consider these potential variances when evaluating the financial performance of C12 Group.