When does the ASU 2016-02, Leases, become effective for Deer Solution's annual periods?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
FASB ASU No. 2016-02 – Leases (Topic 842) is effective for the calendar year 2022. The standard requires lessees to recognize right-of-use assets and liabilities for most leases with terms longer than twelve months. The Company has evaluated the impact of this standard on its financial statements and determined that it doesn't have any lease that meet the requirement to recognize a right-of-use asset and liability because the Company doesn't have any long-term leases.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, FASB ASU No. 2016-02 – Leases (Topic 842) is effective for the calendar year 2022. This standard necessitates that lessees recognize right-of-use assets and liabilities for most leases with terms longer than twelve months.
The company has evaluated the impact of this standard on its financial statements and determined that it doesn't have any lease that meet the requirement to recognize a right-of-use asset and liability because the Company doesn't have any long-term leases.
This means that Deer Solution was required to implement the new lease accounting standard for its 2022 calendar year. However, because Deer Solution does not have any long-term leases, the implementation of this standard did not have any impact on the company's financial statements.