These instructions apply only to Launching Market Centers in their first 18 months.
For additional information on Loss Carry Forward (LCF), please see: What is a Loss Carry Forward? During Launch, the Loss Carry Forward is automatic. If a Market Center is interested in a Loss Carry Forward Reinstatement in the future, they must contact their Regional leadership to begin the process. For more information, please see Loss Carry Forward Reinstatement.
Per IRS Guidelines, business start-up costs incurred prior to Franchise Systems Launch approval (you have been issued your Market Center number) can be entered into AccountEdge as the date it occurred for audit trail purposes or as a journal entry in the first Month End Close month. Please consult your CPA to assist with this. During the first month end close, the Launch Coordinator will direct the Market Center to complete a journal entry to move all expenses from the prior months to the current month. This will allow all opening costs and expenses to be recorded on the income statement in preparation for the first month end close.
The Launching Market Center must complete the month end close financials review with the Launch Coordinator and Regional leadership to ensure all financials are in order. The LCF, if any, will auto-calculate when the financials are synced from AccountEdge to CommandMC. The Market Center does not have to enter any LCF amount in the system. The LCF amount can be located in CommandMC > Transactions > Month End Close > KW Invoice > Loss Carry Forward content box.
Market Centers that are launching at the end of the year will be required to perform a month end close at the end of the year to finalize their current financials. Market Centers will book any opening costs during the first fiscal year as advised by their CPA. This will enable the system to bring over their LCF to their next year.
The Loss Carry Forward will be reflected in the month end close tab > KW Invoice > Loss Carry Forward content box.
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