Where are implementation costs for certain hosted software contracts recognized within Atwell Suites' financial statements?

According to Atwell Suites' 2025 Franchise Disclosure Document, the implementation costs for specific hosted software contracts are recognized within the 'prepaid and other current assets' line item in the company's financial statements. These costs are then amortized over the term of the hosting arrangement using a straight-line basis.

For a prospective Atwell Suites franchisee, this means that the initial expenses related to setting up and implementing certain software systems will be recorded as assets on the balance sheet. These assets are not immediately expensed but are gradually recognized as expenses over the period the software services are used. This accounting treatment aligns the cost of the software with the benefit received from its use over time.

The straight-line amortization method ensures that the same amount of expense is recognized in each period, providing a consistent and predictable impact on the income statement. This approach can help franchisees better understand and manage their financial performance, as the software costs are spread out evenly rather than being recognized all at once.

It is important for franchisees to understand the specific types of software contracts to which this accounting treatment applies, as well as the length of the amortization period. This information will help them accurately forecast their expenses and assess the overall financial impact of these software systems on their business.