What accounting principles were used in the Extreme Art Studio Franchising, LLC financial statements?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
n ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Extreme Art Studio Franchising, LLC as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the company uses accounting principles generally accepted in the United States of America. The financial statements of Extreme Art Studio Franchising, LLC have been audited, and the auditor's opinion is that they present fairly the company's financial position as of December 31, 2023, and its operations and cash flows for the year then ended, in accordance with these principles.
The notes to the financial statements further clarify that Extreme Art Studio uses the accrual basis of accounting. The company's accounting period is the 12-month period ending December 31 of each year. The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) is the single official source of authoritative U.S. generally accepted accounting principles (GAAP).
For a prospective Extreme Art Studio franchisee, this means the franchisor's financial reporting follows standard and accepted practices. Understanding these principles is crucial for interpreting the financial statements and assessing the financial health of the franchisor. Franchisees should be aware that the use of estimates is inherent in the preparation of financial statements and actual results could differ from those estimates.