Baskin Robbins 2015 Annual Report Download - page 78

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-68-
classified as noncurrent in the balance sheet. The guidance does not change the existing guidance which prohibits offsetting
deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. Based on the effective date for
all public companies, this guidance is effective for the Company in fiscal year 2017, and early adoption is permitted. The
guidance may be applied either prospectively or retrospectively to all periods presented. The Company retrospectively adopted
this guidance as of December 26, 2015, resulting in a reclassification of $49.2 million of current deferred tax assets to other
assets and other long-term liabilities of $7.7 million and $41.5 million, respectively, in the consolidated balance sheet as of
December 27, 2014. The adoption of this guidance did not have any impact on the Company's consolidated statements of
operations or cash flows.
In April 2015, the FASB issued new guidance to simplify the presentation of debt issuance costs, which requires that debt
issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with
debt discounts or premiums, instead of as an asset. Based on the effective date for all public companies, this guidance is
effective for the Company in fiscal year 2016, and early adoption is permitted. The guidance may be applied prospectively or
retrospectively to all periods presented. The Company retrospectively adopted this guidance as of December 26, 2015, which
resulted in a reclassification of debt issuance costs of $11.5 million from other assets to long-term debt, net in the consolidated
balance sheet, resulting in a corresponding reduction in total assets and total long-term liabilities as of December 27, 2014. The
adoption of this guidance did not have any impact on the Company’s consolidated statements of operations or cash flows.
In May 2014, the FASB issued new guidance for revenue recognition related to contracts with customers, except for contracts
within the scope of other standards, which supersedes nearly all existing revenue recognition guidance. The new guidance
provides a single framework in which revenue is required to be recognized to depict the transfer of goods or services to
customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or
services. In August 2015, the FASB issued new guidance to defer the mandatory effective date by one year and permit early
adoption, but not before the original effective date. As a result, this guidance is now effective for the Company in fiscal year
2018 with early adoption permitted in fiscal year 2017. The Company expects to adopt this new standard in fiscal year 2018,
and is currently evaluating the impact the adoption of this new standard will have in the Company’s accounting policies,
consolidated financial statements, and related disclosures, and has not yet selected a transition method.
(y) Reclassifications
The Company has revised the presentation of revenues and related costs from the sale of Dunkin’ Donuts products in certain
international markets within the consolidated statements of operations due to the growth in and the nature of such transactions.
To conform to the current period presentation, revenues totaling $1.2 million have been reclassified from other revenues to
sales of ice cream and other products for fiscal year 2014, and expenses totaling $1.2 million have been reclassified from
general and administrative expenses, net to cost of ice cream and other products for fiscal year 2014. There were no such
transactions in fiscal year 2013 requiring reclassification. There was no impact to total revenues, total operating costs and
expenses, operating income, income before income taxes, or net income as a result of these reclassifications.
(z) Subsequent events
Subsequent events have been evaluated up through the date that these consolidated financial statements were filed.
(3) Franchise fees and royalty income
Franchise fees and royalty income consisted of the following (in thousands):
Fiscal year ended
December 26,
2015
December 27,
2014
December 28,
2013
Royalty income $ 463,960 438,074 411,428
Initial franchise fees and renewal income 49,262 44,255 42,548
Total franchise fees and royalty income $ 513,222 482,329 453,976