What method does Batteries Plus Bulbs use to calculate depreciation for property and equipment?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
written off when receivables are determined to be uncollectible. In 2024 and 2023, the Company recorded a charge of $0 and $505, respectively. Interest income on notes receivable is recognized using the effective-interest method.
Property and Equipment
Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives range from three to ten years for furniture, fixtures and equipment, five years for vehicles, five to ten years for leasehold improvements and three to seven years for software.
Internal-Use Software
Costs related to internal-use software are expensed as incurred until the preliminary project stage is completed and the application development stage is reached. During the application development stage, costs of certain development activities are capitalized. Such costs can include external direct costs, direct
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
December 31, 2024 and 2023 (Dollars in thousands, except per share amounts)
payroll and payroll-related costs, and interest costs. Internal-use software is carried at cost and amortized straight-line over seven years beginning when the asset is placed in service.
Capital expenditures for internal-use software totaled $3,205 and $2,832 for the years ended December 31, 2024 and 2023, respectively.
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, the company calculates depreciation for property and equipment using the straight-line method over the estimated useful lives of the assets. The estimated useful lives range from three to ten years for furniture, fixtures, and equipment. Vehicles are depreciated over five years. Leasehold improvements have a useful life of five to ten years, while software is depreciated over three to seven years.
For internal-use software, costs are expensed as incurred until the preliminary project stage is completed and the application development stage is reached. During the application development stage, certain development activities are capitalized, including external direct costs, direct payroll and payroll-related costs, and interest costs. Internal-use software is carried at cost and amortized straight-line over seven years beginning when the asset is placed in service.
Batteries Plus Bulbs also reviews long-lived assets, primarily property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable from future, undiscounted cash flows expected to be generated by the asset. If the asset is not fully recoverable, an impairment loss would be recognized for the difference between the carrying value of the asset and its estimated fair value based on discounted net future cash flows.