What method does Baymont Inn Suites use to calculate depreciation for property and equipment?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and Equipment
Property and equipment (including building and leasehold improvements) are recorded at cost and presented net of accumulated depreciation and amortization. Depreciation, recorded as a component of depreciation and amortization on the Consolidated Statements of Income, is calculated utilizing the straight-line method over the lesser of the lease terms or estimated useful lives of the related assets. Amortization of leasehold improvements, also recorded as a component of depreciation and amortization, is calculated utilizing the straight-line method over the lesser of the estimated benefit period of the related assets or the lease terms. Useful lives are generally up to 20 years for leasehold improvements, 30 years for buildings, up to15 years for building improvements and fromthree to seven years for furniture, fixtures and equipment.
The Company capitalizes the costs of software developed for internal use in accordance with the guidance for accounting for costs of computer software developed or obtained for internal use. Capitalization of software developed for internal use commences during the development phase of the project. The Company amortizes software developed or obtained for internal use on a straight-line basis over its estimated useful life, which is generally three to five years. Such amortization commences when the software is substantially ready for its intended use.
The Company recorded depreciation expense of $44 million, $49 million, and $46 million during 2024, 2023 and 2022, respectively, related to property and equipment.
Source: Item 23 — RECEIPTS (FDD pages 97–443)
What This Means (2025 FDD)
According to the 2025 Baymont Inn Suites Franchise Disclosure Document, the company records property and equipment at cost, presented net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the shorter of the lease terms or the estimated useful lives of the assets.
For leasehold improvements, Baymont Inn Suites also uses the straight-line method, amortizing them over the shorter of the estimated benefit period or the lease terms. The estimated useful lives for various assets are generally up to 20 years for leasehold improvements, 30 years for buildings, up to 15 years for building improvements, and three to seven years for furniture, fixtures, and equipment.
Software developed for internal use is capitalized during the development phase and amortized on a straight-line basis over its estimated useful life, typically three to five years, commencing when the software is substantially ready for its intended use. In 2024, 2023, and 2022, Baymont Inn Suites recorded depreciation expenses of $44 million, $49 million, and $46 million, respectively, related to property and equipment.