What specific years were affected by the understatement of receivables-trade discovered by Cinch I.T.?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
d December 31, 2020. Receivables from these customers totaled $17,642 as of December 31, 2020.
The Company expects these relationships to continue.
8. PRIOR PERIOD ADJUSTMENT
Cartain errors resulting in an understatement of previously reported receivables – trade at December 31, 2019 and 2020 were discovered during the current year. Accordingly, an adjustment of $21,198 was made to increase receivables – trade for the year ended December 31, 2020.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, errors were found that led to an understatement of previously reported receivables. These errors specifically affected the financial statements for the years ending December 31, 2019, and December 31, 2020.
As a result of discovering these errors, an adjustment of $21,198 was made to increase the receivables-trade for the year ending December 31, 2020. Additionally, the net effect of the restatement led to a decrease in net loss of $32,487 and an increase in member's deficit of $53,685 for the same year.
Prospective franchisees should be aware of these prior period adjustments as they review Cinch I.T.'s financial statements. Understanding the nature and impact of these adjustments is crucial for assessing the company's financial performance and stability. It would be prudent to inquire about the reasons for the errors and the measures Cinch I.T. has taken to prevent similar issues in the future.