How does Camp Margaritaville account for investments in unconsolidated entities in its consolidated financial statements?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company has investments in unconsolidated entities. The Company does not control these entities and uses the equity or cost method to account for these investments. For equity investments accounted for using the equity method, the Company records its share of the income or loss from each entity in the fiscal year in which each entity's year-end occurs. Equity securities without a readily determinable fair value are recorded at cost less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Refer to Note 5 for further explanation of these investments in unconsolidated entities.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the company has investments in entities that it does not control. Camp Margaritaville uses either the equity or cost method to account for these investments.
For equity investments, Camp Margaritaville records its share of the income or loss from each entity in the fiscal year in which the entity's year-end occurs. For equity securities without a readily determinable fair value, the company records these at cost, less any impairment, adjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.
Note 5 of the financial statements provides further details on these investments in unconsolidated entities. This accounting treatment is standard practice, ensuring that Camp Margaritaville's financial statements accurately reflect its financial position, including its interests in other business ventures, while adhering to generally accepted accounting principles.