How often does 1 800 Packouts evaluate the recoverability of the carrying amount of goodwill?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company amortizes goodwill over a period of ten years. The Company evaluates the recoverability of the carrying amount of goodwill at the entity level whenever events or circumstances indicate the carrying amount may not be recoverable. Management has determined there was no impairment as of December 31, 2023 and 2022.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, the company evaluates the recoverability of goodwill at the entity level. This evaluation occurs whenever events or circumstances suggest that the carrying amount of goodwill may not be recoverable.
In simpler terms, 1 800 Packouts assesses the value of its goodwill—an intangible asset representing the brand's reputation, customer relationships, and other non-quantifiable assets acquired in a business combination—when there are indications that its recorded value might be too high. This could be triggered by events like a significant loss of customers, adverse changes in the market, or other factors that could diminish the brand's value.
The FDD indicates that management determined there was no impairment as of December 31, 2023 and 2022. This suggests that in those specific years, the company's goodwill was not deemed to have lost value requiring a write-down. However, the evaluation process is ongoing and event-driven, meaning it's not just an annual review but a continuous assessment based on prevailing conditions.