What accounting policy change did Canopy Lawn Care implement during 2024?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
We draw attention to Note 10 of the consolidated financial statements, which describes a change in the Company's accounting policy of allocating a portion of the Company's parent company's provision or credit for income taxes. During 2024, the Company has opted to no longer record an allocation for its parent company's provision or credit for income taxes, as allowed by Accounting Standards Codification 740, Income Taxes, as it better reflects the specific tax position of the Company.
This change has been applied retrospectively. As a result, the Company has restated its comparative consolidated financial statements to reflect the new policy. The effect of this change is disclosed in Note 10, including adjustments to the opening balance of member's equity. Our opinion is not modified in respect of this matter.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 55)
What This Means (2025 FDD)
According to the 2025 FDD, Canopy Lawn Care's parent company, Outdoor Living Brands Holdco, LLC, implemented a change in its accounting policy during 2024. Specifically, the company opted to no longer record an allocation for its parent company's provision or credit for income taxes. This decision was made as allowed by Accounting Standards Codification 740, Income Taxes, because it was determined to better reflect the specific tax position of the company.
This accounting policy change was applied retrospectively, meaning that the company restated its comparative consolidated financial statements to reflect the new policy. The effect of this change is disclosed in Note 10 of the consolidated financial statements, including adjustments to the opening balance of member's equity.
For a prospective Canopy Lawn Care franchisee, this change primarily affects the presentation and interpretation of the company's financial statements. The restatement ensures that financial data from previous years is comparable under the new accounting policy, providing a more accurate view of the company's financial performance. While this change does not directly impact the franchisee's day-to-day operations, understanding these accounting adjustments is important for assessing the overall financial health and stability of the franchisor.