For Atwell Suites, how are balance sheet accounts translated regarding foreign currency?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
xamination by the tax authorities.
Comprehensive Income
Comprehensive income is the change in Parent's Investment during the year that results from transactions with parties other than the Parent. Other comprehensive income (comprehensive income less net income) includes the effects of foreign currency translation and pension liability adjustments. The Company's comprehensive income is presented on the consolidated statements of comprehensive income.
Fair Value of Financial Instruments
The aggregate fair value of cash and cash equivalents, accounts receivables, and accounts payable as of December 31, 2024, approximates their carrying value due to their relatively short-term nature. Deferred compensation plan investments are recorded at market value as described on page 13 above.
Notes to Consolidated Financial Statements (continued)
1. Description of the Business and Summary of Significant Accounting Policies (continued)
Foreign Currency Translation
Balance
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, the company translates balance sheet accounts at the exchange rates effective at each year's end. Income and expense accounts are translated using the weighted-average exchange rates prevailing during the year.
The functional currency for entities operating outside the U.S. is the currency of the primary economic environment in which they operate. However, if the economy is considered highly inflationary, the functional currency defaults to U.S. dollars. Gains and losses from foreign exchange, as well as the impact of exchange rate changes on long-term intercompany transactions, are typically included in other comprehensive income.
Additionally, gains and losses from foreign exchange rate changes related to intercompany receivables and payables of a working capital nature are reported separately on the consolidated statements of net income. For the years ending December 31, 2024, 2023, and 2022, these resulted in a net gain (loss) of $3.2 million, $(3.9) million, and $(3.1) million, respectively. This detailed approach to foreign currency translation ensures that Atwell Suites accurately reflects its financial performance and position, especially given its international operations.