How often does 360 Painting review its long-lived assets for impairment?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
duce both the lease liability and the right-of-use asset.
Intangible Assets
Intangible assets consist of trademarks and franchise relationships. Intangible assets are stated at their estimated fair value at the date of acquisition. Amortization is computed over the estimated useful lives of the related intangible assets using the straight-line method.
Long-lived Assets
In accordance with FASB ASC 360-10, Accounting for Impairment or Disposal of Long-Lived Assets, long-lived assets, such as property and equipment and intangible assets, are reviewed for impairment, at least annually, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company recognized an impairment charge of $137,988 for the year ended December 31, 2022 related
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the company reviews its long-lived assets for impairment at least annually. This includes assets like property, equipment, and intangible assets. The review also occurs whenever events or changes in circumstances suggest that the carrying amount of an asset may not be recoverable.
The recoverability of these assets is determined by comparing the asset's carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount exceeds the estimated future cash flows, 360 Painting recognizes an impairment charge. This charge is equivalent to the difference between the asset's carrying amount and its fair value.
For example, in 2022, 360 Painting recognized an impairment charge of $137,988 related to the trademarks and franchise relationships of Renew Crew, due to the brand's franchised outlets' deteriorating economic performance. This charge was included in depreciation and amortization expense on the consolidated statements of operations. However, no impairment charges were recognized for the years ended December 31, 2023 and December 31, 2024.