What was the total value of Carls' other long-term liabilities on February 1, 2022, after adjustments?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
ase components comprised of maintenance from lease components for real estate leases that commenced prior to our transition to ASC 842. We did not elect the practical expedient that permitted a reassessment of lease terms for existing leases.
Financial Statement Impact of Transition to ASC 842
Transition Impact on February 1, 2022 Combined Consolidated Balance Sheet
Our transition to ASC 842 represents a change in accounting principle. The $452 cumulative effect of our transition to ASC 842 is reflected as an adjustment to February 1, 2022 Accumulated deficit. Our transition to ASC 842 resulted in the following adjustments to our Combined Consolidated Balance Sheet as of February 1, 2022 (in thousands):
| As Reported January 31, 2022 | Total Adjustments | Adjusted February 1, 2022 | ||
|---|---|---|---|---|
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ 32,543 | $ | $ | 32,543 |
| Cash and cash equivalents - restricted | 16,059 | 16,059 | ||
| Accounts receivable, net | 21 ,689 | 21 ,689 | ||
| Due from affiliates | 3,658 | 3,658 | ||
| Inventories | 3,130 | 3,130 | ||
| Prepaid expenses | 8,873 | 8,873 | ||
| Other current assets | 24 | 24 | ||
| Total current assets | 85,976 | 85,976 | ||
| Property and equipment, net | 341 ,885 | 73 a. | 341 ,958 | |
| Operating lease assets | 447,268 b. | 447,268 | ||
| Intangible assets, net | 843,235 | (32,285) C. | 810,950 | |
| Other assets, net | 26,167 | 26,167 | ||
| Total assets $ | 1,297,263 | $ 415,056 | $ | 1,712,319 |
| LIABILITIES AND MEMBERS' DEFICIT | ||||
| Current liabilities: | ||||
| Current portion of long-term debt | $ 11 ,800 | $ | $ | 11 ,800 |
| Current portion of finance leases | 1,466 | 1,466 | ||
| Current portion of operating leases | 76,825 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total value of other long-term liabilities on February 1, 2022, after adjustments, was $281,660. This figure represents the financial obligations Carls has that are not due within the next year. These liabilities can include items such as deferred revenue, pension obligations, or other long-term financial commitments.
For a prospective franchisee, understanding the nature and extent of these liabilities is crucial. It provides insight into the overall financial health and stability of Carls. A high amount of long-term liabilities could indicate potential financial strain, while a lower amount might suggest a more stable financial position.
It's important to note that the adjustment to other long-term liabilities was a reduction of $45,166. This adjustment could be due to various factors, such as revaluations, settlements, or changes in accounting practices. Franchisees should seek clarification from Carls regarding the specific components of these liabilities and the reasons for the adjustments to fully assess the financial implications.