How did the adoption of ASU No. 2014-09 impact the Gokhale Method's financial statements?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)". The ASU and all subsequently issued clarifying ASUs replaced most existing revenue recognition guidance in U.S. GAAP. The ASU also required expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new standard effective January 1, 2020, the first day of the Company's fiscal year, using the modified retrospective approach. The adoption of this standard did not have a material impact on the Company's financial statements.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" in May 2014. This ASU replaced most existing revenue recognition guidance in U.S. GAAP and required expanded disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows from customer contracts. Gokhale Method adopted this new standard on January 1, 2020, using the modified retrospective approach.
The FDD states that the adoption of ASU No. 2014-09 did not have a material impact on Gokhale Method's financial statements. This means that while the company had to update its accounting policies and disclosures to comply with the new standard, the changes did not significantly affect the reported amounts of revenue, expenses, assets, or liabilities.
For a prospective Gokhale Method franchisee, this information indicates that the franchisor has transitioned to the current revenue recognition standards without experiencing major financial adjustments. This suggests a degree of stability and preparedness in the company's financial reporting practices. However, franchisees should still review the complete financial statements and related notes to fully understand Gokhale Method's revenue recognition policies and financial performance.