Shake Shack 2015 Annual Report Download - page 62

Table of Contents
SSE HOLDINGS, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except unit, share, per unit and per share amounts)
We have no unrecognized tax benefits as of December 31, 2014. Our local income tax returns for fiscal 2010 and prior are closed and management continually evaluates expiring
statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.
Pre-Opening Costs
Pre-
opening costs are expensed as incurred and consist primarily of legal fees, occupancy, manager and employee wages, travel and related training costs incurred prior to the opening
of a Shack.
Advertising
The cost of advertising and promotions are expensed as incurred. Advertising and promotions costs amounted to $1,166, $794 and $564 in fiscal 2014, 2013 and 2012, respectively,
and are included in other operating expenses on the Consolidated Statements of Income.
Recently Issued Accounting Pronouncements
In February 2015, the Financial Accounting Standards Board (" FASB ") issued Accounting Standards Update No. 2015-02, Consolidation (" ASU 2015-02 "). ASU 2015-
02 amends
the exiting guidance to: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate
the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those
that have fee arrangements and related party relationships and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are
required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-
7 of the Investment Company Act of 1940 for registered money market funds.
ASU 2015-02 is effective for reporting periods beginning after December 15, 2015. We are currently evaluating the impact ASU 2015-
02 will have on our consolidated financial
statements.
In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Presentation of Financial Statements—Extraordinary and Unusual Items (" ASU 2015-01 "). ASU 2015-
01 eliminates the concept of extraordinary items and related disclosures. ASU 2015-
01 is effective for reporting periods beginning after December 15, 2015. Early adoption is
permitted. The adoption of ASU 2015-01 is not expected to affect our consolidated financial position, results of operations or cash flows.
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements—Going Concern (" ASU 2014-15 "). ASU 2014-
15 provides
guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related
footnote disclosures. ASU 2014-15 is effective for reporting periods ending after December 15, 2016. Early adoption is permitted. The adoption of ASU 2014-
15 is not expected to
affect the Company's consolidated financial position, results of operations or cash flows.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (" ASU 2014-09 "). ASU 2014-
09 supersedes the existing revenue
recognition guidance and clarifies the principles for recognizing revenue. The core principle of ASU 2014-
09 is that an entity should recognize revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-
09 is
effective, on a retrospective basis, for reporting periods beginning after December 15, 2016. Early adoption is permitted, subject to certain conditions. We are currently evaluating the
impact ASU 2014-09 will have on our consolidated financial position, results of operations and cash flows.
NOTE 3 : FAIR VALUE MEASUREMENTS
The carrying value of our financial instruments, including cash, accounts receivable, accounts payable, and accrued expenses as of December 31, 2014 and
December 25, 2013
approximated their fair value due to the short-term nature of these financial instruments. Assets and liabilities that are measured at fair value on a non-recurring basis include our long-
lived assets. There were no impairments recognized during fiscal 2014, 2013 and 2012.
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