How does Amerispec Inspection Services amortize goodwill?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company applies the provisions of Accounting Standards Codification ("ASC") Topic 805, Business Combinations, to its acquisitions. ASC 805 provides guidance regarding the recognition and measurement of goodwill and other acquired intangible assets and requires separate recognition of intangible assets acquired if the benefit of the asset is obtained through contractual or other legal rights, or if the asset can be sold, transferred, licensed, rented, or exchanged. Goodwill is recognized to the extent that the fair value of consideration paid for the acquisition exceeds the estimated fair value of the net assets acquired, including other identifiable intangible assets.
The Company amortizes goodwill on a straight-line basis over 10 years and tests goodwill for impairment at the entity level. Goodwill is tested for impairment only when a triggering event occurs, or circumstances change that indicate the fair value of the entity may be less than the carrying value. No impairment indicators exist as of December 31, 2024 and 2023.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, the company amortizes goodwill using a straight-line basis over a period of 10 years. Goodwill, in this context, is the excess of the purchase price over the fair value of net assets, including identifiable intangible assets, acquired in a business acquisition.
Amerispec Inspection Services adheres to Accounting Standards Codification (ASC) Topic 805, which governs business combinations. This standard dictates how goodwill and other intangible assets are recognized and measured. The company recognizes intangible assets separately if their benefit is obtained through contractual or legal rights, or if they can be sold, transferred, licensed, rented, or exchanged.
Furthermore, Amerispec Inspection Services tests goodwill for impairment at the entity level, but only when a triggering event occurs or circumstances change, suggesting that the entity's fair value may be less than its carrying value. As of December 31, 2024, and 2023, there were no impairment indicators, meaning the value of goodwill was not negatively affected during those periods.