When did Craters & Freighters adopt ASU No. 2016-13?

According to Craters & Freighters's 2025 Franchise Disclosure Document, the company adopted ASU No. 2016-13 on January 1, 2023. This accounting standards update pertains to the measurement of credit losses on financial instruments. It mandates that Craters & Freighters present financial assets, which are measured at amortized cost (including trade receivables), at the net amount expected to be collected over their remaining contractual lives.

Under this standard, Craters & Freighters estimates credit losses based on historical experience, current conditions, and reasonable forecasts that could affect the collectibility of reported amounts. The FDD states that the net impact to retained earnings would have been immaterial, so no adjustment was made to retained earnings.

The document clarifies that the results for the year ended December 31, 2023, are presented under ASC 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP. This means that franchisees reviewing financial statements will see the application of the new standard reflected in the 2023 figures, allowing for a more accurate understanding of potential credit losses on financial instruments.