For Cinnabon, what is the company's general policy regarding the recognition of subsequent events in financial statements if the condition existed at the date of the balance sheet?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company discloses material events that occur after the balance sheet date but before financial statements are issued. In general, these events are recognized in the financial statements if the condition existed at the date of the balance sheet, but are not recognized if the condition did not exist at the balance sheet date. The Company discloses non-recognized events if required to keep the financial statements from being misleading. Management evaluated events occurring subsequent to December 29, 2024 through March 21, 2025, the date these consolidated financial statements were available for issuance, and determined that no subsequent event required recognition or disclosure.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the company's policy regarding subsequent events is to disclose material events that occur after the balance sheet date but before the financial statements are issued. Cinnabon will recognize these events in the financial statements if the condition that led to the event already existed at the balance sheet date.
Conversely, if the condition did not exist at the balance sheet date, the event is generally not recognized in the financial statements. However, Cinnabon will disclose these non-recognized events if such disclosure is necessary to prevent the financial statements from being misleading.
For the financial statements included in the 2025 FDD, Cinnabon's management evaluated events occurring subsequent to December 29, 2024, through March 21, 2025, and determined that no subsequent event required either recognition or disclosure in the financial statements.