What were the deferred direct franchising costs, net of current, for Deka Lash on 12/31/2021?
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 ASS |
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 December 31, 2021, were $510,978. This figure represents the portion of deferred direct franchising costs that Deka Lash expects to recognize as an expense within the next year.
Deferred direct franchising costs typically include expenses that Deka Lash incurs in connection with selling franchises, such as commissions, legal fees, and other related costs. These costs are initially capitalized (recorded as assets on the balance sheet) and then amortized (expensed) over the life of the franchise agreement. The 'current maturities' represent the portion of these deferred costs that will be expensed in the upcoming year, while the remaining balance is considered a long-term asset.
For a prospective Deka Lash franchisee, this information provides insight into the financial management and accounting practices of the franchisor. It demonstrates how Deka Lash accounts for the costs associated with franchise sales and how these costs are recognized over time. While this specific figure may not directly impact the franchisee's day-to-day operations, it contributes to a broader understanding of the franchisor's financial health and stability.