What was the accumulated depreciation amount for Afuri Ramen Dumpling's machinery and equipment?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Property and equipment – Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets (5 years). Improvements which increase the useful life of property and equipment and replacements of major components property and equipment are capitalized while maintenance, repairs, and minor replacements are expensed as incurred.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Afuri Ramen Dumpling's accounting policies state that property and equipment are recorded at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over an estimated useful life of 5 years for the respective assets.
Improvements that extend the useful life of the property and equipment and replacements of major components are capitalized, while regular maintenance, repairs, and minor replacements are expensed as they are incurred.
However, the specific accumulated depreciation amount for machinery and equipment is not disclosed in this excerpt. For a prospective franchisee, this means that while the FDD outlines the depreciation method used, it does not provide the actual figures for accumulated depreciation. It would be prudent for a potential franchisee to ask Afuri Ramen Dumpling's franchisor for detailed financial statements that include these figures to get a clearer picture of the company's asset depreciation.