What accounting pronouncement related to accounting for uncertainty in income taxes has Gold Star adopted?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company has adopted the provisions of the accounting pronouncement related to accounting for uncertainty in income taxes. The Company recognized no interest or penalties in the consolidated statements of income and comprehensive income for each of the years ended December 31, 2024, 2023 and 2022. If the situation arose in which the Company would have interest to recognize, it would recognize this as interest expense and penalties would be recognized in other expenses. Currently, the prior three tax years are open under federal and state statute of limitations and remain subject to review and change. The Company is not currently under audit nor has the Company been contacted by these jurisdictions.
Based on the evaluation of the Company's tax positions, management believes all positions taken would be upheld under an examination. Therefore, no provision for the effects of uncertain tax positions has been recorded for each of the years ended December 31, 2024, 2023, and 2022.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company has adopted an accounting pronouncement related to accounting for uncertainty in income taxes. The document specifies that Gold Star recognized no interest or penalties in the consolidated statements of income and comprehensive income for the years ending December 31, 2024, 2023, and 2022.
If interest were to be recognized, it would be recorded as interest expense, while penalties would be recognized as other expenses. The prior three tax years are currently open under federal and state statutes of limitations and remain subject to review and change. However, Gold Star is not currently under audit, nor has it been contacted by these jurisdictions.
Management believes that all tax positions taken would be upheld under examination. Consequently, no provision for the effects of uncertain tax positions has been recorded for each of the years ended December 31, 2024, 2023, and 2022. This indicates that Gold Star is confident in its tax positions and has not allocated any reserves for potential tax liabilities.