What accounting standard does The Standardx use for consolidating its financial statements?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Principles of Consolidation—Our consolidated financial statements present the results of operations, financial position, and cash flows of Hyatt Hotels Corporation and its majority owned and controlled subsidiaries as well as entities consolidated under the variable interest entity ("VIE") model. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates—We are required to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying footnotes (the "Notes"). Our estimates and assumptions are subject to inherent risk and uncertainty, and actual results could differ materially from our estimated amounts.
Reclassifications—Certain prior year amounts have been reclassified to conform to the current year presentation.
Revenue Recognition—Our revenues are primarily derived from the products and services provided to our customers and are generally recognized when control of the product or service has transferred to the customer. Our customers primarily include third-party owners and franchisees, guests at owned and leased hotels, customers that use our distribution services through ALG Vacations and Mr & Mrs Smith, a third-party partner through our co-branded credit card programs, and owners and guests of residential and vacation units. A summary of our revenue streams is as follows:
- Gross fees—Gross fees include base management fees, incentive management fees, and franchise and other fees.
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the company's consolidated financial statements include the results of operations, financial position, and cash flows of Hyatt Hotels Corporation and its majority-owned and controlled subsidiaries, as well as entities consolidated under the variable interest entity (VIE) model. All intercompany accounts and transactions are eliminated during the consolidation process. This means that The Standardx follows standard accounting principles to combine the financial data of its various entities into a single set of financial statements, providing a comprehensive view of the company's overall financial performance and position.
The FDD emphasizes that The Standardx's management is required to make estimates and assumptions that affect the amounts reported in its consolidated financial statements and accompanying footnotes. These estimates and assumptions are subject to inherent risk and uncertainty, and actual results could differ materially from the estimated amounts. This is a standard practice in accounting, as many financial figures require some level of estimation. However, it also means that the financial statements are not exact and are subject to interpretation.
The document also mentions that certain prior-year amounts may have been reclassified to conform to the current year's presentation. This ensures consistency in financial reporting over time, making it easier to compare financial performance across different periods. The Standardx's revenues are primarily derived from products and services provided to customers and are generally recognized when control of the product or service has transferred to the customer. These customers include third-party owners and franchisees, guests at owned and leased hotels, customers that use distribution services, a third-party partner through co-branded credit card programs, and owners and guests of residential and vacation units.