When did Carls adopt the Financial Accounting Standards Board's standard regarding credit impairment?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
In June 2016, the Financial Accounting Standards Board ("FASB") issued a standard that requires measurement and recognition of expected versus incurred credit losses for financial assets held, including trade receivables. The standard is effective for interim and annual reporting periods beginning after December 15, 2019 for public entities. For other entities, the standard is effective for interim and annual reporting periods beginning after December 15, 2022. The Company adopted this amendment during the first quarter of 2024. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the company adopted the Financial Accounting Standards Board (FASB) standard regarding credit impairment during the first quarter of 2024. This standard, issued in June 2016, mandates the measurement and recognition of expected versus incurred credit losses for financial assets, including trade receivables. The standard became effective for interim and annual reporting periods after December 15, 2019, for public entities, and after December 15, 2022, for other entities.
For a prospective Carls franchisee, this adoption means that Carls has updated its accounting practices to comply with the latest standards for recognizing and measuring credit losses. However, the FDD states that the adoption of this guidance did not have a material impact on Carls's Consolidated Financial Statements.
This update ensures that Carls's financial reporting is in line with current accounting practices, providing a more transparent view of the company's financial health. While the adoption itself didn't significantly affect the financial statements, it reflects Carls's commitment to adhering to regulatory standards and best practices in financial reporting.