What accounting principles does Eos Worldwide use to prepare its financial statements?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
roperty under a 99-year license agreement and to further sublicense them. The Company will sublicense to franchisees the right to use the EOS trademarks and intellectual property in connection with their franchises.
The Company's duration shall be in perpetuity, unless sooner dissolved in accordance with the operating agreement and applicable law.
Basis of presentation: The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).
Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Source: Item 22 — CONTRACTS (FDD page 74)
What This Means (2025 FDD)
According to Eos Worldwide's 2025 Franchise Disclosure Document, the company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). This is a standard practice for businesses in the U.S., ensuring that financial reporting is consistent and transparent. Using GAAP allows for easier comparison of Eos Worldwide's financial performance with other companies.
Furthermore, the FDD notes that the preparation of these financial statements requires management to make estimates and assumptions that could affect the reported amounts of assets, liabilities, contingent items, revenues, and expenses. This is a common aspect of financial reporting, as some figures require forecasting or judgment. However, the document also cautions that actual results could differ from these estimates, which is a standard disclaimer to acknowledge the inherent uncertainty in financial projections.
In addition, Eos Worldwide recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers, which provides a five-step model for recognizing revenue from contracts with customers. This specific standard provides a structured approach to revenue recognition, ensuring that revenue is recognized when goods or services are transferred to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. This level of detail indicates a commitment to adhering to specific and well-defined accounting standards.