What accounting principles were used in the preparation of Fat Shack Inc. and Subsidiary's financial statements, according to the Independent Auditor's Report?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
the related notes to the financial statements.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of Fat Shack Inc. and Subsidiary as of December 31, 2024, 2023 and 2022 and the results of its operations and its cash flows for the years 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 (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Fat Shack Inc. and Subsidiary, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the financial statements of Fat Shack Inc. and Subsidiary have been prepared in accordance with accounting principles generally accepted in the United States of America. This is based on the Independent Auditor's Report included in the FDD.
Specifically, the auditor's opinion states that the financial statements present fairly the financial position, results of operations, and cash flows of Fat Shack Inc. and Subsidiary as of December 31, 2024, 2023, and 2022. This assessment is made in accordance with accounting principles generally accepted in the United States of America.
Furthermore, the management of Fat Shack Inc. is responsible for preparing and fairly presenting the financial statements in accordance with these same accounting principles. This includes designing, implementing, and maintaining internal controls relevant to the preparation and fair presentation of financial statements, ensuring they are free from material misstatement, whether due to fraud or error.
In addition, Fat Shack America, LLC reorganized as a C corporation under the name Fat Shack Inc. The accompanying financial statements have been prepared on an accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. Under the accrual method, revenues are recognized when earned and expenses are recognized when a liability is incurred, without regard to receipt or disbursement of cash.