What triggers a review for impairment of long-lived assets for Batteries Plus Bulbs?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
Impairment of Long-Lived Assets
Long-lived assets, consisting primarily of property and equipment, are reviewed 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. The Company performed an assessment of property and equipment in 2024 and 2023, which resulted in no impairment to long-lived assets.
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 reviews long-lived assets for impairment whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. These assets primarily consist of property and equipment. The review assesses whether the expected future, undiscounted cash flows from the asset are sufficient to recover its carrying value.
If the asset's carrying value is deemed unrecoverable, Batteries Plus Bulbs would recognize an impairment loss. This loss is calculated as the difference between the asset's carrying value and its estimated fair value, which is based on discounted net future cash flows.
In both 2024 and 2023, Batteries Plus Bulbs performed assessments of its property and equipment. These assessments concluded that no impairment to long-lived assets was necessary, indicating that the carrying values of these assets were supportable by their expected future cash flows during those years.