What is the range of estimated useful lives for software at Batteries Plus Bulbs for depreciation purposes?
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. Inte
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs FDD, the estimated useful lives for software range from three to seven years. This means that Batteries Plus Bulbs depreciates its software assets over this period for accounting purposes.
For a prospective franchisee, this is relevant because it affects the calculation of depreciation expenses, which impacts the franchisee's profitability and tax obligations. Understanding the depreciation timeline helps in forecasting financial performance and managing tax liabilities related to software investments.
Additionally, the FDD specifies that internal-use software is amortized straight-line over seven years once it is placed in service. This indicates a different treatment for software developed for internal operations compared to other software assets, which fall within the three-to-seven-year range. Capital expenditures for internal-use software totaled $3,205 in 2024 and $2,832 in 2023, which shows the level of investment Batteries Plus Bulbs makes in its internal software systems.