What accounting principles must Floors To Go's financial statements adhere to?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Floors To Go, LLC as of December 31, 2024 and 2023, and the results of its operations and 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 Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company 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 47–204)
What This Means (2025 FDD)
According to Floors To Go's 2025 Franchise Disclosure Document, the company's financial statements must adhere to accounting principles generally accepted in the United States of America. This is explicitly stated in the Independent Auditors' Report, which expresses an opinion that the financial statements present fairly the financial position, results of operations, and cash flows of Floors To Go, LLC in accordance with these principles.
This adherence to generally accepted accounting principles (GAAP) is a standard practice for businesses in the United States, ensuring transparency and comparability in financial reporting. It means that Floors To Go follows a common set of rules and guidelines when preparing its financial statements, which helps potential franchisees and other stakeholders understand the company's financial performance and position.
The FDD also mentions a change in accounting principle related to credit losses, with the company adopting Accounting Standards Codification Topic 326, Financial Instruments ‐ Credit Losses, effective January 1, 2023. This update requires the measurement of expected credit losses based on historical experience, current economic conditions, and reasonable forecasts. While the adoption of this standard did not have a material impact on their financial statements and disclosures, it demonstrates Floors To Go's commitment to staying current with evolving accounting standards.