Why did Learningrx have to restate amounts as of October 1, 2021, according to the FDD?
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 Learningrx's 2025 Franchise Disclosure Document, the company restated its financial amounts as of October 1, 2021, due to the adoption of FASB Topic 842, Leases. This new accounting standard required Learningrx to make adjustments related to its lease agreements.
Learningrx elected to use certain practical expedients allowed under the transition guidance, including carrying forward the historical lease classifications. They also used hindsight to determine the lease term for existing leases. This resulted in shortening the lease terms for some leases and the useful lives of related leasehold improvements because certain options to renew were not considered reasonably certain.
The adoption of FASB Topic 842 and the related adjustments led to an increase of $362,438 in both operating lease Right-of-Use (ROU) assets and operating lease liabilities on Learningrx's balance sheet. This restatement ensures that Learningrx's financial statements accurately reflect its lease obligations and assets under the new accounting standard.