When did Checkersrallys adopt ASU 2019-12, Simplifying the Accounting for Income Taxes?
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 accounting standard, issued by the FASB in December 2019, aims to simplify income tax accounting by removing certain exceptions to general principles. It includes changes to Topic 740, which affects how an entity recognizes franchise tax.
For prospective Checkersrallys franchisees, this adoption means that the company's financial statements from January 4, 2022, onward reflect the simplified accounting method for income taxes as outlined in ASU 2019-12. The document states that upon evaluation, Checkersrallys determined that the adoption of this standard had no material impact on its financial statements and related disclosures.
This information is relevant for franchisees as it provides transparency into the accounting practices of Checkersrallys. While the company states that the adoption had no material impact, understanding the accounting standards used can help franchisees better interpret the financial statements provided in the FDD and assess the financial health of the company. Franchisees can also consult with their own financial advisors to understand the implications of this accounting standard on their investment.