What is the title of the new accounting pronouncement adopted by Gokhale Method?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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 FDD, Gokhale Method adopted ASU 2014-09, Revenue from Contracts with Customers, effective January 1, 2020. This pronouncement provides guidance on how revenue is recognized when customers obtain control of promised goods or services. The revenue recognized should reflect the consideration that Gokhale Method expects to receive in exchange for those goods or services.
This standard also mandates specific disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This means Gokhale Method is required to provide detailed information about how its revenue is generated and when it is recognized, offering transparency to stakeholders.
For a prospective Gokhale Method franchisee, understanding this accounting pronouncement is important because it affects how the franchisor reports its revenue. While it doesn't directly impact the franchisee's day-to-day operations, it provides insight into the financial reporting practices of Gokhale Method and ensures compliance with current accounting standards. Franchisees can gain confidence in the franchisor's financial reporting by knowing they adhere to these standards.