What accounting standard did Canine Dimensions adopt effective January 1, 2023, and what topic does it cover?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the existing transaction and industry-specific revenue recognition guidelines. The new guidance requires the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Originally the ASU was effective for fiscal years beginning after December 15, 2018 however due to the worldwide pandemic, implementation was delayed a year.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This update supersedes existing transaction and industry-specific revenue recognition guidelines.
The new guidance requires that Canine Dimensions recognize revenue to depict the transfer of promised goods or services to customers. The revenue recognized should reflect the consideration (payment) the company expects to receive in exchange for those goods or services.
Originally, ASU No. 2014-09 was to be effective for fiscal years beginning after December 15, 2018. However, due to the worldwide pandemic, the implementation was delayed by a year. While the FDD does not explicitly state that Canine Dimensions adopted this standard effective January 1, 2023, it does state that the standard supersedes existing guidelines and provides a framework for recognizing revenue based on the transfer of goods or services to customers.