| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2017 |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation The consolidated financial statements represent the financial information of Fogo de Chão, Inc. and its subsidiaries, as well as consolidated joint ventures for which the Company has determined that it is the primary beneficiary. The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). In connection with the closing of the IPO, the Company effected a stock split pursuant to which each share held by the holder of common stock was reclassified into 25.4588 shares. All share and per share data have been retroactively restated in the accompanying financial statements, and in the accompanying notes which are an integral part of the financial statements, to give effect to the stock split. |
| Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the assets, liabilities and results of operations of the Company, as well as consolidated joint ventures for which the Company has determined that it is the primary beneficiary. All intercompany balances and transactions have been eliminated in the consolidated financial statements. |
| Accounting Year | Accounting Year The Company uses a 52/53 week fiscal year convention whereby its fiscal year ends each year on the Sunday that is closest to December 31 of that year. Each fiscal year generally is comprised of four 13-week fiscal quarters, although in the years with 53 weeks the fourth quarter represents a 14-week period. References to Fiscal 2017 relate to the Company’s 52-week fiscal year ended December 31, 2017. References to Fiscal 2016 relate to the Company’s 52-week fiscal year ended January 1, 2017. References to Fiscal 2015 relate to the Company’s 53-week fiscal year ended January 3, 2016. |
| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions, such as the valuation of long-lived, definite and indefinite-lived assets, estimated useful lives of assets, the reasonably assured lease terms of operating leases, valuation of the workers’ compensation and Company-sponsored employee health insurance program liabilities, the fair value of share-based compensation, and deferred tax valuation allowances, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
| Variable Interest Entities ("VIEs") | Variable Interest Entities (“VIEs”) The Company consolidates VIEs in which the Company is deemed to have a controlling interest as a result of the Company having both the power to direct the activities that significantly impact the entity’s economic performance and the right to receive the benefits that could potentially be significant to the VIE. If the Company has a controlling interest in a VIE, the assets, liabilities, and results of the operations of the variable interest entity are included in the consolidated financial statements. |
| Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investment instruments purchased with an original maturity of three months or less to be cash equivalents. Cash consists of deposits held at major banks that at times exceed federally insured limits or in international jurisdictions where either insurance is not provided or in amounts that exceed amounts guaranteed by the local government or other governmental agencies, and cash on hand in restaurant locations. The Company also maintains certificates of deposit denominated in Brazilian reais, which throughout their terms can be put to the issuer within three months or less from the date of issuance, and with no early withdrawal penalty charges, are considered cash equivalents. The Company has not incurred losses related to any deposits in excess of the FDIC insurance amount and believes no significant concentration of credit risk exists with respect to cash investments. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. Management periodically evaluates the credit worthiness of financial institutions, and maintains cash and cash equivalent accounts only with major financial institutions thereby minimizing exposure for deposits in excess of federally insured amounts. Management believes that credit risk associated with cash and cash equivalents is remote. |
| Accounts Receivable | Accounts Receivable Accounts receivable consist of balances receivable from credit card companies in the normal course of business and generally are liquidated within 30 days or less. As such, no allowance for doubtful accounts is considered to be necessary. |
| Inventories | Inventories Inventories consists of food and beverages and are recorded at the lower of cost or net realizable value. Cost is determined by the first-in first-out method. Any unusable or spoiled inventory is written off when identified. |
| Prepaid Rent | Prepaid Rent Non-current prepaid rent consists of amounts paid in advance relating to restaurant leases executed in Brazil during 2010 and 2012 that expire in 2026 and 2022, respectively, and amounts attributable to restaurant leases in Mexico, which were entered into in 2014 and 2016 that expire in 2024 and 2026, respectively. The current portion of prepaid rent is included in prepaid expenses and other current assets in the consolidated balance sheets. |
| Property and Equipment, Net | Property and Equipment, Net Property and equipment is stated at cost to acquire less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Estimated useful lives are generally as follows:
Estimated Useful Live
Buildings
40 years
Leasehold improvements
5 - 20 years
Furniture, fixtures and equipment
3 - 15 years
Automobiles
5 years Expenditures for maintenance, repairs and betterments that do not enhance the value or increase the estimated useful life of the assets are expensed as incurred and included in restaurant operating costs. Expenditures for betterments and major renewals that significantly enhance the value and increase the estimated useful life of the assets are capitalized. The cost of assets sold or retired and the related amounts of accumulated depreciation are eliminated from the accounts in the year of disposal and the resulting gains or losses are included in operations. |
| Capitalized Interest | Capitalized Interest Direct and certain related indirect costs of construction, including interest, are capitalized in conjunction with construction and development projects. These costs are included in property and equipment and are amortized over the life of the related building and leasehold interest. The Company capitalized $143, $107 and $123 of interest during Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. |
| Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are amortized to interest expense over the term of the debt using the effective interest method for term debt and the straight-line method for revolving debt over the terms of the related instruments. In April 2015, the FASB issued ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs |
| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews property and equipment and definite-lived intangible assets for impairment when events or circumstances indicate these assets may not be recoverable. Factors considered include, significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for the overall business and significant negative industry or economic trends. The recoverability is assessed by comparing the carrying value of the asset to the undiscounted cash flows expected to be generated by the asset. If impairment exists, the amount of impairment is measured as the excess of the carrying amount over the estimated fair value, as determined by each location’s projected future discounted cash flows. This assessment process requires the use of estimates and assumptions regarding future cash flows and estimated useful lives, which are subject to a significant degree of judgment. If these assumptions change in the future, the Company may be required to record impairment charges for these assets. During Fiscal 2017, the Company recognized a $4,188 non-cash impairment charge related to the reduction in the carrying value of an underperforming restaurant in the United States. The Company continues to evaluate the restaurant’s operating performance and its options. A closure of this restaurant could result in a material charge in the period in which the Company ceases operations. During Fiscal 2016, the Company recognized a $320 non-cash impairment charge related to the reduction in the carrying value of an underperforming restaurant in Brazil. The lease for this underperforming restaurant in Brazil expired in September 2017 and was not renewed. The Company did not record any impairment related to long-lived assets in any of the other periods presented. |
| Goodwill | Goodwill Goodwill represents the excess of the purchase price of the acquired business over the fair value of the assets acquired and liabilities assumed resulting from the acquisition. Goodwill is not amortized. Goodwill is tested annually for impairment during the fourth quarter, or more frequently should an event occur or circumstances indicate that the carrying amount may be impaired. Such events or circumstances may be a significant change in business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition, changes in strategy or disposition of a reporting unit or a portion thereof. The Company has identified two reporting units, United States and Brazil, based on the geography of the Company’s operations to which goodwill is attributable. The impairment evaluation for goodwill is conducted annually using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit, including goodwill. The estimated fair value of the reporting unit is determined on the basis of discounted future cash flows. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, then a second step must be completed in order to determine the amount of the goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The resulting implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for any excess or carrying value over fair value. No impairment to goodwill was recorded during any of the periods presented. |
| Intangible Assets | Intangible Assets Indefinite-lived intangible assets are not amortized, but are tested for impairment annually during the fourth quarter, or more frequently if circumstances indicate potential impairment, through a comparison of fair value to its carrying amount. The estimated fair value is determined on the basis of discounted future cash flows using the relief from royalty method. If the estimated fair value is less than the carrying amount of the indefinite-lived intangible asset, then an impairment charge is recorded to reduce the asset to its estimated fair value. The indefinite-lived intangible assets relate to the assigned value of the Fogo de Chão trade name. Definite-lived intangible assets consist of non-compete agreements. The non-compete agreements are amortized over 5 years, which is the term of the agreements, and are measured for impairment when events or circumstances indicate the carrying value may be impaired in the same manner as long-lived assets. The Company did not record any impairment related to intangible assets in any of the periods presented. |
| Liquor Licenses | Liquor Licenses The costs of obtaining non-transferable liquor licenses directly issued by local government agencies for nominal fees are expensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets and are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount is not recoverable, an impairment charge is recorded for the excess of the carrying amount over the fair value. Fair value is determined based on prices in the open market for licenses in same or similar jurisdictions. No impairments were recorded during any of the periods presented. Annual liquor license renewal fees are expensed as incurred. |
| Fair Value | Fair Value Fair value is defined as the price that would be received to sell an asset or price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Authoritative guidance for fair value measurements establishes a hierarchy that prioritizes the inputs to valuation models based upon the degree to which they are observable. The three levels of the fair value measurement hierarchy are as follows: Level 1: Inputs represent quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable or the asset or liability through correlation with market data at the measurement date for the duration of the instrument’s anticipated life. Level 3: Inputs are unobservable and therefore reflect management’s best estimate of the assumptions that market participants would use in pricing the asset or liability. As of December 31, 2017 and January 1, 2017, the fair value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current liabilities approximated their carrying value due to their short-term nature. The carrying amounts of the long-term debt approximate fair value as interest rates vary with the market interest rates and negotiated terms and conditions are consistent with current market terms (Level 2). |
| Revenue | Revenue Revenue from restaurant sales is recognized when food and beverage products are sold and is presented net of employee meals and complimentary meals. Proceeds from the sale of gift cards that do not have expiration dates are recorded as deferred revenue at the time of the sale and recognized as revenue when the gift card is redeemed by the holder. The portion of gift cards sold which are never redeemed is commonly referred to as gift card breakage. The Company recognizes gift card breakage revenue for gift cards when the likelihood of redemption becomes remote and the Company determines there is no legal obligation to remit the value of the unredeemed gift cards to governmental agencies. The Company estimates the gift card breakage rate based upon the pattern of historical redemptions. The Company recognized $164, $162 and $136 in gift card breakage revenue during Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. During the fourth quarter of Fiscal 2015, the Company began selling gift cards through a non-related third party. Proceeds from the sale of gift cards that do not have expiration dates are recorded as deferred revenue at the time of the sale and recognized as revenue when the gift card is redeemed by the holder. Commissions related to gift cards sold by third parties are initially deferred and subsequently recognized in earnings as a component of other restaurant operating expense, in the same pattern as the revenue related to the gift card is recognized. Deferred costs are included in prepaid expenses and other current assets in the consolidated balance sheet. The amount of deferred costs at December 31, 2017 and at January 1, 2017, attributable to gift cards sold by third parties, was immaterial. |
| Sales Taxes | Sales Taxes Revenue is presented net of sales taxes. The sales tax payable obligation is included in accrued expenses until the taxes are remitted to the appropriate taxing authorities. |
| Operating Leases and Deferred Rent | Operating Leases and Deferred Rent The Company operates the majority of its restaurants in leased premises. The Company records the minimum base rents including option periods which in the judgement of management are reasonably assured of renewal. For purposes of calculating straight-line rents, the lease term commences on the date the Company obtains control of the property, which is normally when the property is ready for normal tenant improvements (build-out period). The difference between rent expense and rent paid is recorded as a deferred rent liability. Allowances for tenant improvements are included in the deferred rent liability and recognized over the life of the lease by reducing rent expense. Favorable lease assets and unfavorable lease liabilities, representing the difference between the market rates in effect for acquired leases compared to the various lease payments on individual operating leases, are amortized on a straight-line basis to rent expense over the lease term remaining at the time of the acquisition. Favorable leases are included in other assets (noncurrent) in the consolidated balance sheets. Unfavorable lease liabilities are included in other noncurrent liabilities in the consolidated balance sheets. Contingent rent expense is recognized, and subsequently accrued, when it becomes probable that the Company will achieve restaurant sales above a specified target amount, evaluated on a per lease basis. |
| Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising costs were approximately $8,013, $7,084 and $6,685 for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. |
| Pre-Opening Costs | Pre-Opening Costs Pre-opening costs incurred with the opening of new restaurants are expensed as incurred. These costs include wages, benefits, travel and lodging for the training and opening management teams, and food, beverage and other restaurant operating expenses incurred prior to a restaurant opening for business including lease costs. In addition, preopening costs include marketing costs incurred prior to opening as well as meal expenses for entertaining guests as part of the restaurant opening. |
| Insurance Reserves | Insurance Reserves The Company is self-insured for certain losses related to workers’ compensation claims and Company-sponsored employee health insurance programs. The Company estimates the accrued liabilities for all self-insurance programs at the end of each reporting period. The Company engages a third party actuary to assist management with estimating its liability for its workers’ compensation claims based on discounted cash flows. The liability calculated based on discounted cash flow estimates was $1,923 and $1,747 as of December 31, 2017 and January 1, 2017, respectively, compared to an undiscounted liability of approximately $2,100 and $1,900, respectively. The estimated current portion of the accrued liability attributable to workers’ compensation is $707 and $649 as of December 31, 2017 and January 1, 2017, respectively, and is included in accounts payable and accrued expenses in the consolidated balance sheet. The estimated non-current portion is included in other non-current liabilities. The estimated liability for all other self-insurance programs is not discounted and is based on a number of assumptions and factors, including historical trends and actuarial assumptions. The accrued liability attributable to these other self-insurance programs is $383 and $347 as of December 31, 2017 and January 1, 2017, respectively, and is included in accounts payable and accrued expenses in the consolidated balance sheets. To limit exposure to losses, the Company maintains stop-loss coverage through third-party insurers with a deductible of $250 per claim. |
| Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, “Accounting for Income Taxes,” which requires an asset and liability approach for financial accounting and reporting of income taxes. Under ASC Topic 740, income taxes are accounted for based upon the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. The Company estimates its annual effective tax rate at each interim period based on the facts and circumstances available at that time while the actual effective tax rate is calculated at year-end. The Company is subject to income taxes in the US, Puerto Rico, Brazil, Netherlands and Mexico. In evaluating its ability to recover its deferred tax assets, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, the Company begins with historical results adjusted for the results of discontinued operations and changes in accounting policies and incorporates assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company uses to manage its underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income (loss). The Company recognizes tax liabilities in accordance with ASC 740, and adjusts those liabilities when judgments change as a result of evaluation of new information not previously available. Significant judgment is required in assessing, among other things, the timing and amounts of deductible and taxable items. Due to the complexity of some of these uncertainties, the ultimate resolution may result in payment that is materially different from the Company’s current estimate of its tax liabilities. These differences are reflected as increases or decreases to income tax expense in the period in which they are determined. Income taxes relate to the Company’s domestic federal income tax, Puerto Rico income tax, tax in the Company’s foreign subsidiary in Brazil, tax in the Company’s consolidated joint venture in Mexico, tax in the Company’s foreign subsidiary in the Netherlands, margin tax and state tax in certain US jurisdictions. The provision for income taxes for the foreign subsidiary in Brazil is calculated under the presumed profits method. Under the presumed profits method, the tax authority applies a percentage of the foreign subsidiary’s revenue as the profit margin, and taxes the presumed profits at the current federal rate in Brazil. The Company applies the authoritative guidance related to uncertainty in income taxes. The Company has concluded that there were no uncertain tax positions identified during its analysis. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. On December 22, 2017, new tax reform legislation, commonly referred to as the Tax Cuts and Jobs Act (“Tax Act” or “TCJA”) was signed into law effective January 1, 2018. In the fourth quarter of Fiscal 2017, the Company recorded a provision to income taxes for its preliminary assessment of the impact of the Tax Act. Pursuant to Staff Accounting Bulletin No. 118 (“SAB 118”), the Company recorded provisional amounts related to estimated calculations based on information available as of December 31, 2017. As further regulatory guidance is issued by the applicable taxing authorities, as accounting treatment is clarified, as the Company performs additional analysis on the application of the law, and as the Company refines its estimates in calculating the effect, the Company’s final analysis may be different from current provisional amounts. Any changes to the provisional amounts will be recognized in the period completed which could materially affect the Company’s tax obligations and effective tax rate. Furthermore, there may be certain aspects of the Tax Act that will require the Company to adopt a new accounting policy, such as the section 951A GILTI tax provisions. The Company has not completed an analysis of the effect of these provisions and, therefore, has not elected an accounting policy for the effect of these provisions. The Company had historically provided deferred taxes under ASC 740-30-25, formerly APB 23, for the presumed repatriation to the United States of earnings from the Company’s Brazilian subsidiaries. In June 2015, the Company asserted that the outside basis difference, including undistributed earnings of its Brazilian subsidiaries would be indefinitely reinvested in operations outside the United States. This was primarily driven by a reduction in debt service costs on a go-forward basis as a result of the IPO. The assertion was supported by future US cash projections and the Company’s intent to continue using foreign-generated cash to invest in foreign restaurants. As a result of the Tax Act, the Company’s outside basis difference in the foreign subsidiaries has changed. The Company is in the process of measuring the deferred tax liability that would be recorded were the Company to change its indefinite reinvestment assertion. As this analysis is incomplete, the Company is not currently able to provide a reasonable estimate for a deferred tax liability. Pursuant to SAB 118, the Company will continue to apply ASC 740 based on the provisions of the tax law in effect immediately prior to the enactment of the Tax Act, including the historical indefinite reinvestment assertion with respect to the outside basis differences. |
| Share-Based Compensation | Share-Based Compensation The Company measures share-based awards granted to employees and directors based on the fair value of the award on the date of grant. The fair value of stock option awards is determined using the Black-Scholes option-pricing model. The fair value of restricted stock awards is the fair value of the Company’s common stock on the date the restricted stock is awarded. The fair value of the share-based awards is recognized as an expense, net of forfeitures, over the requisite service period, which is generally the vesting period of the respective award. For awards with both service and performance conditions, the expense is recognized using the graded vesting method. For awards with only service conditions, the expense is recognized using the straight-line method. In December 2017, the Company issued restricted stock designated as performance awards to the Company’s executive officers and certain senior management. These performance-based restricted shares were granted pursuant to the Company’s 2015 Omnibus Incentive Plan. The determination of the number of performance-based restricted shares that each individual may receive is subject to, and calculated by reference to, the achievement by the Company of goals measured by a range of targeted financial performance, as defined, and the individual’s continued employment through the end of the measurement period. The fair value of these performance awards is based on the fair value of the award on the date of grant. Compensation expense attributable to performance awards is recognized using the straight-line method. The amount of compensation expense recognized is based upon the estimated number of performance awards expected to be earned. This estimate is reassessed at each reporting period with an adjustment to the total amount of compensation expense to be recognized accordingly. For liability-classified awards, compensation expense is recognized over the period during which services are rendered by the employee until completed. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is re-measured using the then-current fair value of the Company’s common stock and updated assumption inputs in the Black-Scholes option-pricing model. The Company did not have any liability-classified awards outstanding as of December 31, 2017 or January 1, 2017. The Company classifies share-based compensation expense in its consolidated statement of operations and comprehensive income (loss) in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. In March 2016, the FASB issued ASU 2016-09, “ Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting |
| Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to Fogo de Chão, Inc. by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is calculated using net income (loss) attributable to Fogo de Chão, Inc. divided by diluted weighted-average shares of common stock outstanding during each period. Potentially dilutive securities include shares of common stock underlying stock options and restricted stock. Diluted earnings (loss) per share considers the impact of potentially dilutive securities, except in periods in which there is a loss, because the inclusion of the potential common shares would have an anti-dilutive effect. In December 2017, the Company issued restricted stock designated as performance awards to the Company’s executive officers and certain senior management. The determination of the number of performance-based restricted shares that each individual may receive is subject to, and calculated by reference to, the achievement by the Company of goals measured by a range of targeted financial performance, as defined, and the individual’s continued employment through the end of the measurement period. Shares whose issuance is contingent upon the satisfaction of certain conditions are considered outstanding and included in the computation of diluted earnings (loss) per share if all necessary conditions have been satisfied by the end of the period assuming the end of the reporting period was also the end of the contingency period (the events have occurred). |
| Foreign Currency Translation | Foreign Currency Translation The Company considers the Brazilian Real the functional currency of its Brazilian subsidiary because it conducts substantially all of its business in that currency. The Mexican Peso is the functional currency of the Company’s joint venture in Mexico because substantially all of the business of the joint venture is conducted in that currency. The assets and liabilities of the Brazilian subsidiary and of the joint venture in Mexico are translated into US dollars, which is the Company’s reporting currency, at exchange rates existing at the balance sheet dates. Revenue and expenses are translated at average exchange rates and shareholders’ equity balances are translated at historical exchange rates. Adjustments resulting from translating foreign functional currency financial statements into US dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive income (loss). The functional currency of the Company’s other subsidiaries is the US dollar. |
| Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in equity during a period except those resulting from investments by and distributions to shareholders. Accumulated comprehensive income (loss) consists of the Company’s net income (loss) and foreign currency translation adjustments from operations in Brazil, net of related income tax effects. Accumulated comprehensive loss attributable to the Company’s joint venture in Mexico consists of the net loss of the joint venture and adjustments resulting from translating the foreign functional currency financial statements of the joint venture into US dollars. |
| Segment Reporting | Segment Reporting Fogo de Chão, Inc. owns and operates full-service, Brazilian steakhouses in the US (including the US Territory of Puerto Rico) and Brazil using a single restaurant concept and brand. Each restaurant under the Company’s single global brand operates with similar types of products and menu, providing a continuous service style, similar contracts, customers and employees, irrespective of location. ASC 280, “Segment Reporting” “management approach” |
| Recently Issued Accounting Standards | Recently issued accounting standards not included below are not expected to have a material impact on the Company’s consolidated financial position or results of operations. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The core principle of the standard is that an entity recognizes 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 or services. This ASU will replace most existing revenue recognition guidance in GAAP. New qualitative and quantitative disclosure requirements aim to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This ASU permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers the effective date of ASU 2014-09 by one-year for all entities. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. Additionally, in March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," in April 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," and in May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," all of which provide additional clarification on certain topics addressed in ASU 2014-09. This guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods therein. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interim periods therein. The majority of the Company’s revenues are from food and beverage sales at its restaurants. ASU 2014-09 will not have an impact on revenue recognition related to food and beverage sales. ASU 2014-09 requires gift card breakage to be recognized as revenue in proportion to the pattern of gift card redemptions exercised by customers. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect adjustment to opening retained earnings as of the date of adoption (modified retrospective approach). The Company has elected the modified retrospective adoption method and plans to adopt this guidance in the first quarter of Fiscal 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. The Company has evaluated the impact of adoption on the recognition of license fee and other income related to the Company’s joint ventures and does not believe the adoption will have a material impact on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This guidance requires the recognition of most leases on the balance sheet to give investors, lenders, and other financial statement users a more comprehensive view of a company’s long-term financial obligations as well as the assets it owns versus leases. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Currently, all of the Company’s restaurant and our restaurant support center leases are accounted for as operating leases, and therefore are not recorded within the balance sheet. The Company expects this adoption will result in a material increase in the assets and liabilities on its consolidated balance sheets, but will likely have an insignificant impact on its consolidated statements of earnings. In preparation for the adoption of the guidance, the Company is implementing controls and key system changes to enable the preparation of financial information. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this, the amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses will be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The amendments in this ASU will be applied using a modified-retrospective approach and, for public entities, are effective for fiscal years beginning after December 15, 2019 and interim periods within those annual periods. Early adoption is permitted for fiscal years beginning after December 15, 2018 and interim periods within those annual periods. The Company has not yet evaluated the impact the adoption of this standard will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by current GAAP. ASU 2016-15 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, and early adoption is permitted. The Company will adopt ASU 2016-15 effective Fiscal 2018. Upon adoption there will be no impact on the Company’s consolidated statement of cash flows. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350).” ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has not yet evaluated the impact the adoption of this standard will have on its consolidated financial statements. |
