What is Carls currently doing in regards to the new FASB guidance issued in December 2023?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
In December 2023, the FASB issued guidance that enhances income tax disclosures including expanded qualitative effective tax rate reconciliation. The standard also requires annual disclosure of income taxes paid disaggregated by federal, state and foreign taxes. The standard is effective for annual reporting periods beginning after December 15, 2024 for public entities. For other entities, the standard is effective for annual reporting periods beginning after December 15, 2025. Early adoption of the guidance is permitted. We are currently evaluating the impact the adoption of this standard will have 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 Financial Accounting Standards Board (FASB) issued new guidance in December 2023 that enhances income tax disclosures, including an expanded qualitative effective tax rate reconciliation. This standard also mandates annual disclosure of income taxes paid, broken down by federal, state, and foreign taxes.
The new standard is effective for annual reporting periods beginning after December 15, 2024, for public entities, and after December 15, 2025, for other entities. However, early adoption is permitted. Currently, Carls is evaluating the impact that adopting this standard will have on its Combined Consolidated Financial Statements.
For a potential Carls franchisee, this means that Carls is aware of the upcoming changes in accounting standards and is taking steps to understand how these changes will affect its financial reporting. While the exact impact is still under evaluation, franchisees can expect that Carls will eventually comply with the new disclosure requirements, which could provide more detailed insights into the company's tax obligations and financial performance.