When will Checkersrallys adopt the FASB's ASU 2023-09 standard, Improvements to Income Tax Disclosures?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Recently Issued Accounting Guidance
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Improvements to Income Tax Disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The new requirements will be effective for annual periods beginning after December 15, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the company will adopt the Financial Accounting Standards Board's (FASB) ASU 2023-09, Improvements to Income Tax Disclosures for reporting periods beginning after December 15, 2025. This standard necessitates disaggregated information regarding the reporting entity's effective tax rate reconciliation, along with details on income taxes paid. Checkersrallys intends to implement this standard starting December 30, 2025.
The purpose of ASU 2023-09 is to enhance the transparency and detail of income tax disclosures, which is intended to assist investors in making informed decisions about capital allocation. Checkersrallys states that the guidance will be applied on a prospective basis, but they have the option to apply the standard retrospectively.
Currently, Checkersrallys's management is in the process of evaluating the impact of adopting this new accounting standard on the company's consolidated financial statements. This evaluation will help them understand any potential changes or adjustments needed in their financial reporting practices to comply with the updated requirements.