franchisee

ASC 810-952 was the franchisor-specific consolidation guidance within the Consolidation topic, addressing when a franchisor should consolidate a franchisee entity (typically under the variable interest entity model). Every paragraph in the subtopic — the overview, scope, and implementation guidance and illustrations — was superseded by Accounting Standards Update No. 2009-17. As a result, the subtopic contains no operative guidance; franchisors apply the general consolidation model in ASC 810-10.

ASC 952-10 provides incremental, industry-specific accounting and reporting guidance for franchisors — the parties that grant business rights (the franchise) to franchisees. After ASU 2014-09 removed the old franchise revenue recognition rules (now handled under ASC 606 and 340-40), what remains is chiefly guidance on franchising costs, presentation of franchisor-owned versus franchised outlet costs, and outlet/commitment disclosures. Franchisors must also apply all other applicable GAAP not contained in this Topic.