Did the reclassification of workers compensation expense in Hardees' financial statements for the year ended January 31, 2023, affect the previously reported net income?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
e primary economic environment in which the entity operates. Functional currency determinations are made based upon a number of economic factors, including but not limited to cash flows and financing transactions. The operations, assets and liabilities of our entities outside the United States are initially measured using the functional currency of that entity. The income and expense accounts are then translated into U.S. dollars at the average exchange rates prevailing during the period. The assets and liabilities are t
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, certain prior year amounts in the Consolidated Statements of Operations were reclassified to be comparable with the current year classification. Specifically, for the year ended January 31, 2023, workers compensation expense of $2,846 was reclassified from Payroll and other employee benefits to Occupancy and other expense.
This reclassification was purely for presentation purposes. Hardees explicitly states that this change did not result from any changes to accounting policies.
Importantly, the FDD emphasizes that the reclassification had no effect on the previously reported net income. This means that while the line items in the financial statements were adjusted for comparison, the overall profitability of Hardees remained unchanged.