What accounting standard does Alloy use when assessing impairment of long-lived assets?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (''ASC'') 360, Property, Plant, and Equipment, the Company's longlived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset in question may not be recoverable. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, the Company recognizes an impairment loss based on the estimated fair value of the asset. The Company has determined there to be no indicators of impairment as of December 31, 2024 and 2023.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the company adheres to Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 360, Property, Plant, and Equipment, when reviewing its long-lived assets for impairment. This means that Alloy assesses these assets annually, or whenever events or changes suggest that the asset's carrying amount may not be recoverable.
Specifically, Alloy determines impairment by comparing the sum of expected future cash flows (undiscounted and without interest charges) to the carrying amount of the asset. If the expected cash flows are less than the carrying amount, Alloy recognizes an impairment loss. This loss is based on the estimated fair value of the asset at the time of assessment.
The FDD states that as of December 31, 2024, and 2023, Alloy determined that there were no indicators of impairment. This indicates that, for those periods, the expected future cash flows from its assets were sufficient to cover their carrying amounts, and no impairment losses were recognized.