Under what conditions does Ben Jerrys review its fixed assets for impairment?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its franchisees.
(e) Inventories
Inventories are stated at the lower of cost or net realizable value. The Company costs inventory utilizing First In First Out (FIFO).
(f) Fixed Assets
Fixed assets are carried at cost less accumulated depreciation and amortization. Depreciation, including amortization of leasehold improvements, is computed using the straight-line method over the shorter of the estimated useful lives of the related assets or lease term. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated
Notes to Consolidated Financial Statements
December 31, 2024 and 2023
(Dollars in Thousands)
by that asset or asset group to its carrying amount.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 89–133)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, the company reviews fixed assets for impairment whenever events or changes in circumstances suggest that the carrying amount of an asset may not be recoverable. This means that if something happens that indicates the value of an asset has declined significantly, Ben Jerrys will assess whether the asset's book value is still accurate.
To determine if an impairment has occurred, Ben Jerrys first compares the undiscounted cash flows expected to be generated by the asset to its carrying amount. If the carrying amount cannot be recovered on an undiscounted cash flow basis, an impairment is recognized. The impairment is the difference between the asset's carrying amount and its fair value. Fair value is determined using valuation techniques such as discounted cash flow models, quoted market values, and third-party appraisals.
For a prospective Ben Jerrys franchisee, this policy means that the value of fixed assets could be adjusted downwards if circumstances indicate impairment. However, the FDD states that for the years ended December 31, 2024 and 2023, no events or circumstances occurred that required an asset or asset group to be tested for impairment. This suggests that Ben Jerrys has not had to write down the value of its assets in recent years.