When does Chocolate Fish Coffee record expenses?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the company records expenses when they are incurred. This is explicitly stated within the summary of significant accounting policies. The financial statements are prepared following accounting principles generally accepted in the United States of America (US GAAP).

For a prospective franchisee, this means that Chocolate Fish Coffee adheres to standard accounting practices where expenses are recognized in the period they are used or consumed, regardless of when the payment is made. This approach provides a clear and consistent view of the company's financial performance, aligning with standard accounting practices.

It's important to note that the preparation of financial statements requires management to make estimates and assumptions that could affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates. This is a standard disclaimer in financial statements, acknowledging the inherent uncertainties in financial reporting.