What was the beginning balance of deferred revenue for Healthsource Chiropractic as a result of the 2019 accounting change?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
incurred on all indebtedness for the years ended December 31, 2024, 2023 and 2022 was $257, $5,625, and $5,787, respectively.
NOTE I – NOTE PAYABLE – MEMBER
The Company had a note payable to a member totaling $132,000. The note, along with accrued interest, was paid off during the 2022 calendar year in accordance with the member's agreement.
NOTE J – DEFERRED REVENUE:
Prior to the adoption of ASC 606 (Note A), the initial revenue recognized by the Company for a Regional Development sale was recognized in the year of the sale. In accordance with
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the beginning balance of deferred revenue as a result of the 2019 accounting change was $91,500 as of one year, $107,800 as of two years prior, and $157,600 as of three years prior. These figures represent the amount of revenue that Healthsource Chiropractic had received but not yet recognized as earned revenue at the beginning of each respective year due to the accounting change implemented in 2019.
Deferred revenue typically arises when a company receives payment for goods or services that have not yet been delivered or performed. In the context of a franchise, this could relate to initial franchise fees or other upfront payments that are recognized over the term of the franchise agreement. The table also shows the revenue recognized in the current year that was included in the deferred balance at the beginning of the period. For example, $16,300 was recognized in the current year from the beginning deferred revenue balance for two years, and $49,800 was recognized three years prior.
The ending balance of deferred revenue represents the remaining amount that will be recognized in future periods. For example, the ending balance of deferred revenue is $75,200 for one year prior, $91,500 for two years prior, and $107,800 for three years prior. This information is important for prospective franchisees as it provides insight into how Healthsource Chiropractic recognizes revenue and manages its financial obligations over time. Understanding these accounting practices can help franchisees assess the financial stability and transparency of the franchisor.