What accounting standard did Learningrx adopt regarding leases, and what date was the initial adoption?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
g both checking and money market accounts. Deposits are carried at cost. The carrying amount of deposits is displayed on the balance sheet as Cash and Cash Equivalents. The FDIC insurance covers the first $250,000 of deposits per financial institution.
5. Leases
The Company adopted FASB Topic 842, Leases, using the modified retrospective approach with October 1, 2021 as the date of initial adoption. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. In addition, the Company elected the practical expedient to use hindsight in determining the lease term for existing leases, which resulted in shortening the lease terms for certain existing leases and the useful lives of correspon
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the company adopted FASB Topic 842, Leases, using the modified retrospective approach. The date of initial adoption was October 1, 2021.
Learningrx elected to use practical expedients permitted under the transition guidance, allowing them to carry forward the historical lease classification. They also used hindsight to determine the lease term for existing leases, which shortened the lease terms for some leases and the useful lives of related leasehold improvements because certain options to renew were not reasonably certain.
The adoption of this standard required Learningrx to restate amounts as of October 1, 2021. This resulted in an increase in operating lease ROU (Right-of-Use) assets of $362,438 and an increase in operating lease liabilities of $362,438. This means that Learningrx had to recognize the value of their leased assets and the corresponding liabilities on their balance sheet, reflecting the rights and obligations associated with their leases.