What was Checkersrallys' determination regarding the material impact of adopting ASU 2019-12 on its financial statements and related disclosures?
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 as of January 4, 2022. ASU 2019-12, issued by the FASB in December 2019, simplifies accounting for income taxes by removing certain exceptions to general principles and amending Topic 740, including franchise tax recognition.
Checkersrallys determined that the adoption of ASU 2019-12 had no material impact on its financial statements and related disclosures. This means that the changes in accounting standards did not significantly affect the reported financial position, results of operations, or cash flows of the company.
For a prospective franchisee, this indicates that Checkersrallys's financial reporting is stable and that the adoption of new accounting standards has not introduced any significant volatility or adjustments. This can provide some reassurance regarding the transparency and reliability of the company's financial information.