What accounting standard does Checkersrallys use for income taxes?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ax expense (benefit) | | (2,030) | | (98,648) | | (26,576) | | (10,272) | | Income tax expense (benefit) | | 540 | | (7,542) | | (2,952) | | (206) | | Net loss | $ | (2,570) | $ | (91,106) | $ | (23,624) | $ | (10,066) |
CHECKERS DRIVE-IN RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
June 17, 2023 through January 1, 2024 (Successor) Sugar 2, 2023 CPredecessor) CPredecessor) For the Periods Ended Net loss $ (2,570) $ (91,106) $ (23,624) $ Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization A 6,638 A mortization of deferred financing costs A mortization of deferred financing costs Deferred income tax expense (benefit) Noncash operating lease expense, net Eight-of-use asset amortization for finance lease Change in favorable leasehold interests Change in unfavorable leasehold interests Noncash stock based compensation Noncash interest on long-term debt Loss on disposal of fixed assets Net loss on disposal of fixed assets Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net Decrease (increase) in inventory Decrease (increase) in prepaid expenses (1,648) Decrease (increase) in other noncurrent assets 231 Changes in other noncurrent assets 232 Decrease (increase) in other noncurrent assets 233 Changes in other noncurrent assets (1,241) Decrease (increase) in other noncurrent assets 231 Control of the distribution of the current assets (1,241) Decrease (increase) in other noncurrent assets Depreciation and amortization 10,066) Amortization of deferred financing costs 54 892 1,771 Provision for credit losses 122 94 134 Deferred income tax expense (benefit) 4 (7,529) (2,961) Noncash operating lease expense, net 5,490 6,878 14,914 Right-of-use asset amortization for finance lease 455 262 204 Change in favorable leasehold interests 232 146 - Change in unfavorable leasehold interests (31) Noncash stock based compensation 132 5,720 1,208 Noncash interest on long-term debt 2,534 13,808 9,882 Impairment of long-lived assets 670 839 606 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net 0,1618 0,211 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0,201 0 Provision for credit losses 122 94 134 Deferred income tax expense (benefit) 4 (7,529) (2,961) Noncash operating lease expense, net 5,490 6,878 14,914 Right-of-use asset amortization for finance lease 455 262 204 Change in favorable leasehold interests 232 146 - Change in unfavorable leasehold interests (31) (29) - Noncash stock based compensation 132 5,720 1,208 Noncash interest on long-term debt 2,534 13,808 9,882 Impairment of long-lived assets 623 66,633 4,763 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants - 238 Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net 927 (564) (153) Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in operating assets (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) 17,193 Deferred income tax expense (benefit) 1,570 Noncash operating lease expense, net 5,490 6,878 14,914 Right-of-use asset amortization for finance lease 455 262 204 Change in favorable leasehold interests 232 146 - 274 Right-of-use asset amortization for finance lease 455 262 204 Change in favorable leasehold interests 232 146 - Change in unfavorable leasehold interests (31) (29) - Noncash stock based compensation 132 5,720 1,208 Noncash interest on long-term debt 2,534 13,808 9,882 Impairment of long-lived assets 623 66,633 4,763 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants - 238 Changes in operating assets and liabilities, net of acquisitions: - 221 522 Decrease (increase) in accounts and notes receivable, net (1,693) 221 522 Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in prepaid expenses (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) (215) Change in favorable leasehold interests Change in unfavorable leasehold interests (31) Noncash stock based compensation Noncash interest on long-term debt Noncash interest on long-term debt Noncash interest on long-term debt 132 5,720 1,208 Noncash interest on long-term debt 2,534 13,808 9,882 Impairment of long-lived assets 623 66,633 4,763 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net Decrease (increase) in inventory 927 (564) Decrease (increase) in prepaid expenses (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) Decrease (increase) in other noncurrent assets Change in unfavorable leasehold interests (31) Noncash stock based compensation 132 5,720 1,208 Noncash interest on long-term debt 2,534 13,808 9,882 Impairment of long-lived assets 623 66,633 4,763 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net Decrease (increase) in inventory 927 (564) Decrease (increase) in other current assets (1,618) Decrease (increase) in other current assets (1,241) Decrease (increase) in other noncurrent assets 25 Noncash stock based compensation 132 5,720 1,208 Noncash interest on long-term debt 2,534 13,808 9,882 Impairment of long-lived assets 623 66,633 4,763 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants 238 Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net 927 (564) (153) Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in other current assets (1,618) 1,137 1,009 Decrease (increase) in other noncurrent assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) ÷ Noncash interest on long-term debt 2,534 13,808 9,882 Impairment of long-lived assets 623 66,633 4,763 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants 238 Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net (1,693) 221 522 Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in prepaid expenses (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) - Impairment of long-lived assets 623 66,633 4,763 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants 238 Changes in operating assets and liabilities, net of acquisitions: 221 522 Decrease (increase) in accounts and notes receivable, net 927 (564) (153) Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in other current assets (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) 758 Net loss on disposal of fixed assets 670 839 606 Net loss on sales of restaurants - 238 Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net (1,693) 221 522 Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in prepaid expenses (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) 9,198 Net loss on sales of restaurants Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net Decrease (increase) in inventory Decrease (increase) in prepaid expenses (1,618) Decrease (increase) in other current assets (1,241) Decrease (increase) in other noncurrent assets 231 602 238 221 522 (1,693) (1,693) (1,618) (1,137 (1,009) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) (1,241) Changes in operating assets and liabilities, net of acquisitions: Decrease (increase) in accounts and notes receivable, net Decrease (increase) in inventory Decrease (increase) in prepaid expenses (1,618) Decrease (increase) in other current assets (1,618) Decrease (increase) in other current assets (1,241) Decrease (increase) in other noncurrent assets 231 602 (78) 1,305 Decrease (increase) in accounts and notes receivable, net (1,693) 221 522 Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in prepaid expenses (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) 32 Decrease (increase) in inventory 927 (564) (153) Decrease (increase) in prepaid expenses (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) Decrease (increase) in prepaid expenses (1,618) 1,137 1,009 Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) (685) Decrease (increase) in other current assets (1,241) 105 931 Decrease (increase) in other noncurrent assets 231 602 (78) (449) Decrease (increase) in other noncurrent assets 231 602 (78) (797) Donesto (Maratao) in one month in the state 159 (Decrease) increase in accounts payable (16) (247) 895 5 (142) (Decrease) increase in accrued liabilities, accrued wages and benefits, deferred revenue, self-insurance, and long-term liabilities (7,774) 9,416 (1,598) (1,205) (Decrease) increase in reserve for restaurant retirement and refranchise costs (544) Change in operating lease liabilities (8,154) (8,250) (18,476) ia ( Other changes, net (237) (584) 490 12 Net cash (used in) provided by operating activities (7,222) 6,996 6,422 16,354 Investing activities (7,269) (5,513) (15,354) (24,838) Acquisition of restaurants, net of cash acquired (1,365) 5 Proceeds from sales of restaurants 842 Tious de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la company de la comp (24,838) Financing activities Payments on short-term financing (940) Tayloria di didita tananang 200 Debt issuance costs (500) Principal payments on long-term debt and related party credit facility (1,304) (1,360) (2,380) . , , Principal payments on capital leases and financing (47) (400) (2,239) (3,541) Repayments of finance lease liabilities (254) (159) (130) 135.7 Proceeds from short-term financing 1,540 - 1 20,000 Froceeds notificing significant minimizing 10,000 Net cash provided by (used in) financing activities 9,435 (1,919) (3,309) 14,079 Net increase (decrease) in cash, cash equivalents (5,056) (436) (12,764) 5,595 Cash and cash equivalents at beginning of period 17,613 18,049 30,813 25,218 Cash and cash equivalents at end of period $ 12,557 $ 17,613 $ 18,049 $ 30,813 See accompanying notes, including the supplemental disclosure of cash flow information in Note 2.
CHECKERS DRIVE—IN RESTAURANTS, INC.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
The 2025 Checkersrallys Franchise Disclosure Document's Item 21 includes the consolidated statements of cash flows. This statement includes a line item for "Deferred income tax expense (benefit)" with values listed for different periods. While this indicates that Checkersrallys accounts for deferred income taxes, the document does not explicitly state which specific accounting standard (e.g., ASC 740) Checkersrallys follows for income taxes.
Without a specific reference to the accounting standard used for income taxes, prospective franchisees should be aware that financial statements can be complex. Deferred income tax, as reflected in the statement of cash flows, arises from temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements. These differences can result in deferred tax assets or liabilities, which may have implications for the company's future tax obligations and reported earnings.
To gain a comprehensive understanding, a prospective Checkersrallys franchisee should directly ask the franchisor about the specific accounting standard used for income taxes and request clarification on any aspects of the financial statements that are unclear. Consulting with a financial advisor is also recommended to fully assess the financial health and accounting practices of Checkersrallys.