What is the effective date for the provisions of ASU 2023-09 for The Standardx, and is early adoption permitted?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
ncome Taxes (Topic 740): Improvements to Income Tax Disclosures*. ASU 2023-09 requires enhanced annual income tax disclosures including (1) disaggregation of effective tax rate reconciliation categories, (2) additional information for reconciling items that meet a quantitative threshold, and (3) incomes taxes paid by jurisdiction. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively for all prior periods presented. We are currently assessing the impact of adopting ASU 2023-09.
Expense Disaggregation Disclosures—In November 2024, the FASB issued Accounting Standards Update No. 202
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the provisions of ASU 2023-09, which pertains to income tax disclosures, are set to be effective for fiscal years commencing after December 15, 2024. This update necessitates enhanced annual income tax disclosures, including the disaggregation of effective tax rate reconciliation categories, additional information for reconciling items meeting a quantitative threshold, and income taxes paid by jurisdiction.
For a prospective The Standardx franchisee, this means that The Standardx will be required to implement these enhanced disclosure requirements for its financial reporting. The FDD indicates that early adoption of ASU 2023-09 is permitted, and the provisions may be applied either prospectively or retrospectively for all prior periods presented.
The Standardx is currently evaluating the impact of adopting ASU 2023-09. Franchisees should be aware that changes in accounting standards can affect how The Standardx reports its financial performance, which in turn could influence the perceived financial health and stability of the franchise system.