What approach did Exit use when adopting the CECL standard?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company adopted the CECL standard effective January 1, 2023, using the required modified retrospective approach. The impact of the adoption was not considered material to the financial statements.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the company adopted the CECL (Current Expected Credit Loss) standard effective January 1, 2023. The standard relates to how companies account for credit losses on financial instruments.
Specifically, Exit used the "modified retrospective approach" when adopting CECL. This approach requires applying the new standard to the beginning of the fiscal year of adoption, with a cumulative effect adjustment to opening equity.
However, Exit notes that the impact of adopting the CECL standard was not considered material to the financial statements. This suggests that the change in accounting standards did not significantly affect Exit's reported financial position or results of operations.