What accounting standard did Checkersrallys adopt on January 4, 2022?
Checkersrallys 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 Checkersrallys's 2025 Franchise Disclosure Document, the company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, on January 4, 2022. This standard was issued by the FASB (Financial Accounting Standards Board) as part of their 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.
For prospective Checkersrallys franchisees, this means that Checkersrallys has updated its accounting practices to align with the latest standards for income tax recognition. This adoption 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.
The FDD states that Checkersrallys determined that the adoption of ASU 2019-12 had no material impact on its financial statements and related disclosures. This suggests that the change did not significantly alter the reported financial results or require substantial adjustments in how the company presents its financial information.