What accounting principles are used in the preparation of Del Taco's financial statements?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
s and 119 company-operated and 470 franchise-operated Del Taco restaurants.
References to the Company throughout these notes to condensed consolidated financial statements are made using the first person notations of "we," "us" and "our."
Basis of presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC").
These financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2024 ("2024 Form 10-K"). The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our 2024 Form 10-K.
In our opinion, all adjustments considered necessary for a fair presentation of financial condition and results of operations for these interim periods have been included. Operating results for one interim period are not necessarily indicative of the results for any other interim period or for the full year.
Fiscal year — The Company's fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Both fiscal years 2025 and 2024 include 52 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks. All comparisons between 2025 and 2024 refer to the 16 weeks ("quarter") and 16 weeks ("year-to-date") ended January 19, 2025 and January 21, 2024, respectively, unless otherwise indicated.
Use of estimates — In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to the 2025 Del Taco FDD, the company's consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) and follow the rules and regulations established by the Securities and Exchange Commission (SEC). This means Del Taco adheres to a standardized framework of accounting rules, conventions, and procedures when creating its financial reports. This ensures consistency and comparability in financial reporting.
Furthermore, the FDD states that the accounting policies used in preparing the condensed consolidated financial statements are the same as those described in the company's 2024 Form 10-K. This implies that Del Taco maintains consistent accounting practices from year to year, allowing for easier analysis of financial performance over time. Any adjustments considered necessary for a fair presentation of financial condition and results of operations for interim periods have been included.
In preparing the financial statements, Del Taco's management is required to make certain assumptions and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates may involve seeking advice from actuaries and other experts. This is a standard practice in accounting, but it also means that the actual amounts could differ materially from these estimates. Prospective franchisees should be aware of this inherent uncertainty when reviewing Del Taco's financial statements.
Del Taco also applies specific accounting treatments for items such as advertising costs and allowance for credit losses. For instance, marketing fund contributions from Del Taco franchise and company-operated restaurants were approximately 4.0% of sales in 2025 and 2024. The company also monitors the financial condition of franchisees to estimate the allowance for credit losses based on historical collection experience and current market conditions. These specific accounting policies provide further insight into how Del Taco manages and reports its financial performance.