Where on Itan's financial statements is the Employee Retention Credit (ERC) included?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
, the Company is following the guidance in International Accounting Standards, or IAS, 20, Accounting for Government Grants and Disclosure of Government Assistance. Under the provisions of IAS 20, "a forgivable loan from the government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan." Under IAS 20, government grants are recognized in income as required activities are undertaken. Included in other income on the statement of earnings for the year ended December 31, 2022 is the full amount of the PPP loan, $74,517. No liability for the P
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the Employee Retention Credit (ERC) that the company qualified for in the second quarter of 2020 and the second quarter of 2021, which totaled $31,452, is included in other income on the company's statement of earnings for the year ended December 31, 2022.
For a prospective Itan franchisee, this indicates how Itan accounted for the ERC on its financial statements during the specified period. The ERC was a refundable tax credit available to eligible employers under the CARES Act. Itan recognized this credit as other income, which is a common practice for non-operating income sources.
It is important to note that the specific details regarding the ERC and its accounting treatment are for the year ended December 31, 2022. Franchisees should be aware that tax credits and their accounting treatment can change over time based on legislative updates and accounting standards. Therefore, it is advisable to consult with a financial professional for the most current and relevant information.