What Accounting Standards Update regarding disclosure improvements did the FASB issue in October 2023 that affects Management Recruiters?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. In U.S. Securities and Exchange Commission (SEC) Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles (GAAP) to the FASB for potential incorporation into the FASB Accounting Standards Codification® (Codification). The Codification is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. ASU 2023-06 is the result of the Board's decision to incorporate into the Codification 14 of the 27 disclosures referred by the SEC. Since we are already subject to the SEC's existing disclosure requirements, the effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The adoption of this new guidance should not have any impact on the Company's financial statements and related disclosures.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the Financial Accounting Standards Board (FASB) issued ASU 2023-06 in October 2023, titled "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." This update incorporates 14 disclosures referred by the U.S. Securities and Exchange Commission (SEC) into the FASB Accounting Standards Codification.
The update stems from the SEC's initiative to streamline and update its disclosure requirements, some of which overlap with generally accepted accounting principles (GAAP). The FASB then considered incorporating some of these SEC disclosure requirements into its own codification.
For Management Recruiters, since they are already subject to the SEC's existing disclosure requirements, the amendments will take effect when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is prohibited. The adoption of ASU 2023-06 is not expected to significantly impact Management Recruiters' financial statements or related disclosures.