What is Checkersrallys' management currently reviewing regarding the adoption of the ASU 2023-09 accounting standard?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
In December 2023, the FASB issued 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. The Company will adopt this standard on December 30, 2025. Management is currently reviewing the impact of the adoption of this accounting standard on the Company's consolidated financial statements.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, management is currently reviewing the impact of adopting ASU 2023-09, Improvements to Income Tax Disclosures, on the company's consolidated financial statements. This accounting standard, issued by the FASB in December 2023, mandates disaggregated information about a reporting entity's effective tax rate reconciliation and details on income taxes paid. The aim is to enhance transparency for investors, providing them with more detailed income tax disclosures to aid in capital allocation decisions.
The new requirements will be effective for annual periods beginning after December 15, 2025, and Checkersrallys plans to adopt this standard on December 30, 2025. The guidance can be applied prospectively, with the option for retrospective application. This means Checkersrallys can choose to apply the changes only to future periods or also restate prior periods for comparison.
For a prospective Checkersrallys franchisee, this indicates that the company is proactively assessing how these new disclosure requirements will affect its financial reporting. While the FDD does not specify the exact nature of the impact, the review suggests that Checkersrallys is committed to complying with the latest accounting standards and providing transparent financial information. Franchisees may want to inquire about the expected changes and how they might affect the presentation and interpretation of the company's financial results.