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Franchisor Accounting Update – Recognition Of Initial Franchise Fees
Article written by: Anna Markin, CPA, MBA Manager, Assurance & Business Advisory Services FASB Listened to Franchisors and Proposed “Practical Expedient” to Recognition of Initial Franchise Fees This practical expedient is still in the proposed stage with FASB; however, FASB voted 4 to 3 to finalize on December 9, 2020. As a result, we anticipate a final standard in early […]
Accounting For Delivery Fees
Article written by: Dustin Minton, CPA, MBA Director, Assurance & Business Advisory Services Anna Markin, CPA, MBA Manager, Assurance & Business Advisory Services For the past few years, the delivery trend has been on the rise with many delivery service providers (DSPs) like DoorDash, Grubhub, and Uber Eats providing an easy and convenient platform for your customers […]
Revenue Recognition And Leases: FASB Gives Certain Entities More Time
Private companies and most nonprofits were supposed to implement updated revenue recognition guidance in fiscal year 2019 and updated lease guidance in fiscal year 2021. In the midst of the novel coronavirus (COVID-19) crisis, the Financial Accounting Standards Board (FASB) has decided to give certain entities an extra year to make the changes, if they need it. Expanded deferral option […]
What To Expect During A Franchise Audit
It’s important for franchisors to periodically audit individual franchisees. These routine “check-ups” are especially valuable in a store’s early years of operations or if performance starts to deteriorate. They can be used to detect symptoms of unhealthy performance and treat problems before they spiral out of control. Focus on royalty payments Royalties are a franchisor’s primary source of income. Because […]
Auditing Royalty Agreements
Companies often grant licenses to others allowing them to use intellectual property — such as a patent or proprietary computer code — in exchange for royalties. Licensors can hire an external audit firm to ensure the licensee pays the correct royalty rate and amount. Here’s how the audit process works. The agreement The parties’ attorneys usually create a royalty agreement […]