What should Carbones Pizzeria's management evaluate when preparing consolidated financial statements?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
al and state income tax returns of the Company are subject to examination by the income taxing authorities, generally for three years after they were filed. Interest and penalties, if any, assessed by income taxing authorities, will be recorded in operating expenses.
In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP"), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company are made by the Company the allowance for doubtful accounts and the tax valuation allowance. Actual results could differ from those estimates.
Notes to Consolidated Financial Statements As of and For the Year ended October 31, 2022
B. CONCENTRATION OF RISK
The Company maintains cash balances primarily in one financial institution located in Minnesota. At times, the cash in bank balances may be in excess of the federally insured limits.
M&T had sales to and receivables outstanding from significant customers. Two customers have 16% and 10% of total accounts receivable at October 31, 2022. No customers had sales in excess of 10 % of total sales.
**C.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, when preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP), management needs to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amounts of revenues and expenses during the reporting period.
Carbones Pizzeria's significant estimates include the allowance for doubtful accounts and the tax valuation allowance. The company evaluates its estimates and assumptions based on historical experience and various other factors that are believed to be reasonable under the circumstances. However, the FDD notes that actual results could differ from these estimates.
Furthermore, management is also responsible for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Management must also evaluate whether there are conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.