What was the deferred direct franchise costs amount for Deka Lash in 2/31/2023?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
s used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about DL Franchising, LLC's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, amount other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
The Mumford Group Bountiful, Utah
February 24, 2024
| 1 | 2/31/2023 | . 1 | 2/31/2022 | 7 1 | 12/31/2021 | |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents Accounts receivable, net of allowance for doubtful | $ | 402,347 | S | 415,665 | 5 | 507,842 |
| accounts of $28,000, $6,718 and $6,718, |
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the current maturities of deferred direct franchising costs as of February 31, 2023, were $569,298. This figure represents the portion of the initial franchise fees and other direct costs that Deka Lash has deferred and will recognize as expenses over a specific period.
For a prospective Deka Lash franchisee, understanding deferred costs is crucial because it reflects how the franchisor amortizes its initial expenses related to setting up a new franchise. The deferred costs are recognized over time, matching the revenue generated by the franchise. This accounting practice provides a more accurate picture of the franchisor's financial performance.
It is important to note that the FDD includes financial statements as of a specific date, and these figures can change over time. Reviewing these costs helps potential franchisees assess the financial stability and accounting practices of Deka Lash. Additionally, it is important to note that February 31 is not a valid date, so the actual date is likely February 28, 2023, in a common year or February 29, 2023, in a leap year.