When did Checkers adopt ASU 2019-12 regarding simplifying the accounting for income taxes?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The standard was issued as part of the Board's simplification initiative. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC 740. The update makes several amendments to Topic 740 including a change in the way an entity recognizes franchise tax. ASU 2019-12 is effective for entities that are not public business entities for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Upon evaluation of the pronouncement, the Company has adopted the standard as of January 4, 2022, and determined it has no material impact on the financial statements and related disclosures.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers adopted ASU 2019-12, which simplifies the accounting for income taxes, on January 4, 2022. This standard, issued by the FASB (Financial Accounting Standards Board), aims to streamline income tax accounting by removing certain exceptions to general principles.
The adoption of ASU 2019-12 includes changes to Topic 740 of the ASC (Accounting Standards Codification), which affects how Checkers recognizes franchise taxes. For prospective franchisees, this means that Checkers' financial statements reflect these simplified accounting methods for income taxes starting from the specified date.
Checkers evaluated the pronouncement and determined that the adoption of ASU 2019-12 did not have a material impact on its financial statements and related disclosures. This suggests that while the accounting method changed, it did not significantly alter the reported financial results. Franchisees reviewing these statements should be aware of this adoption but understand that it did not fundamentally change the company's financial position.