When did the Gokhale Method adopt the new revenue recognition standard?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
ccounting Pronouncement Adopted
The Company adopted ASU 2014-09, Revenue from Contracts with Customers, and the subsequent amendments to the initial guidance, effective January 1, 2020. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the company adopted ASU 2014-09, Revenue from Contracts with Customers, effective January 1, 2020. This also includes subsequent amendments to the initial guidance. This new standard replaced most existing revenue recognition guidance in U.S. GAAP.
Under this standard, Gokhale Method recognizes revenue when a customer obtains control of promised goods or services. The revenue amount reflects the consideration the entity expects to receive in exchange for those goods or services. The standard also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.
The adoption of this standard did not have a material impact on Gokhale Method's financial statements. For a prospective franchisee, this means that the change in accounting standards did not significantly alter how the company reports its financial performance. This provides some reassurance that the financial statements are relatively stable and comparable across different periods.