What was the impact of the adoption of Topic 326 on the accumulated deficit for Ledgers?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
) | | (82,735) | | (6,284) | | Other income | | = | | (115,395) | | 554 | | Other expense | | 485 | | 4,014 | | 3,246 | | Total other (income) expense | (2 | 24,290) | | (194,116) | _ | (2,484) | | Loss before income taxes | (4 | 65,991) | | (604,600) | | (600,527) | | Income tax benefit | (1 | 04,000) | | (98,000) | , | (153,000) | | Net loss | $ (30 | 61,991) | $ | (506,600) | $ | (447,527) |
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Statements of Changes in Members' Equity
For the Years Ended December 31, 2024, 2023, and 2022
| | Capital Contributions | Accumulated Deficit | Total | |----------------------
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the adoption of Topic 326 increased the accumulated deficit by $42,286. The accumulated deficit as of December 31, 2023, was restated to include this adjustment.
Specifically, the table provided in Item 22 shows the accumulated deficit before the adoption of Topic 326 and the impact it had on the restated balance. This change is reflected in the financial statements and provides a more accurate representation of the company's financial position.
For a prospective Ledgers franchisee, this indicates a specific accounting adjustment that affected the company's reported financial results. While not necessarily a cause for alarm, it would be prudent to understand the nature of Topic 326 and why its adoption resulted in this adjustment. Further investigation may involve discussing this change with Ledgers during the due diligence process to fully understand its implications.