What impact did the adoption of ASU 2019-12 have on Checkers' financial statements and related disclosures?
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, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, which simplifies accounting for income taxes by removing certain exceptions to general principles and changing how franchise taxes are recognized. This standard 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, with early adoption permitted.
Checkers adopted ASU 2019-12 on January 4, 2022. The company evaluated the pronouncement and determined that the adoption of ASU 2019-12 had no material impact on its financial statements and related disclosures.
For a prospective franchisee, this means that the adoption of this accounting standard did not significantly change how Checkers reports its financial information. Therefore, franchisees reviewing Checkers' financial statements should not see any major differences or need to adjust their analysis due to this accounting change.