Why was the implementation of ASU No. 2014-09 delayed for Canine Dimensions, and by how long?
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's 2025 Franchise Disclosure Document, the implementation of Accounting Standards Update (ASU) No. 2014-09 was delayed due to the worldwide pandemic. The original effective date for fiscal years beginning after December 15, 2018, was pushed back by one year. This update, issued by the Financial Accounting Standards Board (FASB), revises revenue recognition guidelines, requiring companies to recognize revenue when goods or services are transferred to customers, reflecting the expected consideration for those goods or services.
For a prospective Canine Dimensions franchisee, this means that the company's financial statements reflect these updated accounting standards. The delay in implementation was a widespread response to the pandemic's impact on businesses and accounting practices. The change ensures that Canine Dimensions's revenue recognition accurately portrays the exchange of services for consideration, aligning with current accounting principles.
This delay and subsequent implementation of ASU No. 2014-09 is a common practice across many industries, as companies adapt to evolving accounting standards. Franchisees can be confident that Canine Dimensions's financial reporting adheres to these standards, providing a more transparent view of the company's financial performance. Understanding these accounting policies is crucial for franchisees to assess the financial health and stability of the franchise system.