On Benihana's consolidated balance sheets, where are debt issuance costs related to the revolving credit facility recorded?

According to Benihana's 2024 Franchise Disclosure Document, debt issuance costs tied to the revolving credit facility are recorded in "other assets" on the company's consolidated balance sheets. These costs, which are incurred when Benihana takes on long-term debt, are initially capitalized. This means they are recorded as an asset on the balance sheet rather than an immediate expense.

Benihana then amortizes these capitalized costs to interest expense over the term of the debt agreement. The amortization method used is the straight-line method, which approximates the effective interest method. This means that a portion of the debt issuance costs is recognized as an interest expense each period, spreading the cost over the life of the loan.

For prospective Benihana franchisees, understanding how debt issuance costs are handled can provide insight into the company's financial management practices. It's also worth noting that the portion of debt issuance costs related to the term loan and delayed draw term loan is recorded differently, specifically in long-term debt, net of current portion, on the consolidated balance sheets. This distinction highlights the importance of carefully reviewing the balance sheets and understanding the different classifications of debt and related costs.