FASB Proposes Practical Expedient for Franchisors Evaluating Certain Performance Obligations

The FASB has issued a proposed ASU, Franchisors — Revenue From Contracts With Customers (Subtopic 952-606): Practical Expedient. The proposal would “permit certain pre-opening services listed within the guidance to be accounted for as a single bundled, separate performance obligation, if it is probable that the continuing fees in the franchise agreement would be sufficient to cover the franchisor’s continuing costs plus a reasonable profit.”

For more information, see the press release on the FASB’s Web site.