What was the depreciation/amortization expense for Best Brains for the year ended December 31, 2022?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
| Particulars | Schedule No. | Year Ended December 31, 2023 | Year Ended December 31, 2022 |
|---|---|---|---|
| Income: | |||
| Revenue From Operations | 9 | 6,133,087.75 | 4,558,762.03 |
| Other Income | 10 | 47,338.52 | 319,955.18 |
| Total Income | 6,180,426.27 | 4,878,717.21 | |
| Expenses: | |||
| Finance Costs | 11 | 30,503.42 | 12,271.27 |
| Depreciation/Amortization expense | 54,176.42 | 30,529.00 | |
| Operating and other expenses | 12 | 6,052,573.26 | 4,641,772.06 |
| Total Expenses | 6,137,253.10 | 4,684,572.33 | |
| Profit /(Loss) for the Year ( Before | Tax) | 43,173.17 | 194,144.88 |
| Federal Income Tax paid | 7,583.00 | 30,095.00 | |
| State Income Tax paid | 40,395.40 | 11,448.00 | |
| Profit /(Loss) for the Year ( After Ta | ax) | (4,805.23) | 152,601.88 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the depreciation and amortization expense for the year ended December 31, 2022, was $30,529. This figure represents the accounting expense recognized for the reduction in value of Best Brains' assets, such as property, equipment, and software, over that year. Depreciation applies to tangible assets, while amortization applies to intangible assets. These expenses are non-cash, meaning they don't represent an actual outflow of cash during the period but rather an allocation of the asset's cost over its useful life.
For a prospective Best Brains franchisee, understanding depreciation and amortization is important for assessing the company's financial health and profitability. While franchisees do not directly pay for the depreciation/amortization expense of Best Brains Inc., these figures can provide insights into the company's investments in assets and how they are being utilized. Lower depreciation/amortization expenses might suggest older assets or conservative accounting practices, while higher expenses could indicate recent investments in new equipment or software.
It's also worth noting that Best Brains uses a straight-line/declining balance method for depreciation, with asset lives ranging from 5 to 39.5 years, and amortizes software development costs over 5 years. The corporation capitalizes expenditures exceeding $500 for property and equipment. These accounting policies can affect the reported depreciation/amortization expense and should be considered when comparing Best Brains to other franchise opportunities.