What is the abbreviation for the Financial Accounting Standards Board referenced by Carbones Pizzeria?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
The Financial Accounting Standards Board ("FASB") issued guidance FASB Accounting Standards Codification ("ASC") 326 which changed how entities measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The most significant change in this standard is a shift from the incurred loss model to the expected loss model. Under the standard, disclosures are required to provide users of the financial statements with useful information in analyzing an entity's exposure to credit risk and the measurement of credit losses. Financial assets held by the Company that are subject to the guidance in FASB ASC 326 are trade accounts receivable. The impact of the adoption was not considered material to the financial statements and primarily resulted in enhanced disclosures only.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the abbreviation for the Financial Accounting Standards Board is "FASB". This board is referenced in the context of accounting standards and how Carbones Pizzeria measures credit losses for financial assets.
The document mentions that the FASB issued guidance FASB Accounting Standards Codification ("ASC") 326, which changed how entities measure credit losses for most financial assets. The most significant change in this standard is a shift from the incurred loss model to the expected loss model. This means that Carbones Pizzeria is now required to estimate and account for potential credit losses over the life of its financial assets, rather than waiting until a loss is actually incurred.
For a prospective Carbones Pizzeria franchisee, this information is relevant because it highlights the importance of understanding and complying with current accounting standards. Specifically, franchisees should be aware of the expected loss model for measuring credit losses and how it may impact their financial reporting. The FDD also notes that financial assets held by the company that are subject to the guidance in FASB ASC 326 are trade accounts receivable. The impact of the adoption was not considered material to the financial statements and primarily resulted in enhanced disclosures only.