What does Itan consider to be cash equivalents?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ies - The Company follows the alternative accounting standard for private companies with respect to entities under common control. As such, entities under common control have not been evaluated under the guidance in the variable interest subsections of the Financial Accounting Standards Board ("FASB") ASC 810.
Fair value measurements - The Company follows accounting standards consistent with the FASB codification which defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements for all fi
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company considers financial instruments with a fixed maturity date of less than three months to be cash equivalents. This definition is important for understanding Itan's financial statements, as it clarifies how the company classifies its most liquid assets.
Itan holds its cash deposits at a regional bank, and the balance in the account is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank as of December 31, 2024 and 2023. The company had $0 and $104,387 that were in excess of the FDIC limit as of December 31, 2024 and 2023, respectively.
For a prospective franchisee, this definition provides insight into Itan's accounting practices and risk management. Knowing that Itan considers short-term financial instruments as cash equivalents allows for a more accurate assessment of the company's liquidity position. Additionally, the disclosure about FDIC insurance and the amounts exceeding the limit provides transparency regarding the safety of Itan's cash deposits.