What specific audit procedures were performed to evaluate long-lived asset impairment indicators for Benihana?

According to Benihana's 2024 Franchise Disclosure Document, the audit procedures related to the evaluation of long-lived asset impairment indicators included several steps. The auditors tested the effectiveness of internal controls over the company's long-lived asset impairment indicator evaluation. They also evaluated the reasonableness of the company's assessment of impairment indicators.

To evaluate the reasonableness of impairment indicators, the auditors tested long-lived restaurant assets for possible indications of impairment, specifically searching for locations with current period losses or projected losses. They performed inquiries of management regarding the processes and assumptions used to identify potential indicators of impairment and evaluated the consistency of these assumptions with evidence obtained in other areas of the audit. Additionally, the auditors inspected minutes of the board of directors, the company's public statements, operating plans, and industry data to identify any evidence that might contradict management's assumptions.

Finally, the auditors tested the completeness and accuracy of the underlying source information used by management to identify quantitative indicators of impairment. These procedures are designed to ensure that Benihana is accurately assessing the value of its long-lived assets and that any potential impairment is identified and accounted for appropriately. This process helps to provide a more accurate financial picture of the company's health and stability.