For The Standardx, what costs and expenses does ASU 2024-03 require disaggregated information about?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Expense Disaggregation Disclosures—In November 2024, the FASB issued Accounting Standards Update No. 2024-03 ("ASU 2024-03"), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires disclosure of disaggregated information about certain costs and expenses presented on the consolidated statements of income, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, as clarified by Accounting Standards Update No. 2025-01, Income Statement— Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, and may be applied either prospectively or retrospectively for any or all prior periods presented. We are currently assessing the impact of adopting ASU 2024-03.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, Accounting Standards Update No. 2024-03 (ASU 2024-03) mandates the disclosure of disaggregated information regarding specific costs and expenses presented on the consolidated statements of income. This includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization.
For a prospective The Standardx franchisee, this means that The Standardx will be required to provide more detailed breakdowns of these particular expenses in its financial reporting. This level of transparency aims to give investors and stakeholders a clearer understanding of where The Standardx's money is being spent.
However, the document states that the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Standardx is currently assessing the impact of adopting ASU 2024-03. Therefore, franchisees should not expect to see these changes reflected in The Standardx's financial statements until these dates unless The Standardx chooses to adopt them earlier.