What accounting principles did Nothing Bundt Cakes change in 2024?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
s of Accounting The accounts are maintained, and the financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
- b. Fiscal Year The Company's fiscal year ends on the last Sunday in December. Fiscal year 2024 in the following table encompasses a 52-week period whereas fiscal year 2023 reflects a 53-week period.
| Fiscal Year | Fiscal Year- End Date |
|---|---|
| 2024 | December 29, 2024 |
| 2023 | December 31, 2023 |
c. Change in accounting principles – In 2024, the Company changed certain accounting principles to retroactively discontinue the private company accounting elections related to its accounting for franchise fees and goodwill. The Company had elected private company accounting alternatives allowing for i.) the accounting for all qualifying pre-opening franchise activities as a single performance obligation and recognized at a point in time rather than being recognized over the term of the agreement and ii.) the amortization of goodwill and testing of goodwill for impairment at the entity level rather than at the reporting unit level.
The impact of the change in accounting for franchise fees was a decrease to member's equity of $1.2 million as of December 26, 2022, a decrease to royalty, franchise fee and other revenue and a correspondi
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to Nothing Bundt Cakes's 2025 Franchise Disclosure Document, in 2024, the company made changes to certain accounting principles. These changes retroactively discontinued private company accounting elections related to franchise fees and goodwill.
Specifically, Nothing Bundt Cakes had previously used private company accounting alternatives that allowed them to account for all qualifying pre-opening franchise activities as a single performance obligation, recognizing it at a point in time rather than over the term of the agreement. They also amortized goodwill and tested it for impairment at the entity level instead of at the reporting unit level.
The impact of changing the accounting for franchise fees resulted in a decrease to member's equity of $1.2 million as of December 26, 2022, a decrease to royalty, franchise fee and other revenue, and a corresponding decrease to net income of $2.8 million in fiscal year 2023. Additionally, there was an increase to deferred revenue and a corresponding decrease to member's equity of $4.0 million as of December 31, 2023. The impact of changing the accounting for goodwill was an increase to member's equity of $55.3 million as of December 26, 2022, a decrease to amortization expense and a corresponding increase to net income of $35.8 million in fiscal year 2023, and an increase to goodwill and a corresponding increase to member's equity of $91.1 million as of December 31, 2023.