What are the two reporting units to which Best Western has allocated goodwill?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
Goodwill is allocated to two reporting units: (i) WorldHotels, and (ii) AutoClerk. Activity by reporting unit in the current and prior period is organized by reporting unit noted below.
The Company performed a quantitative impairment analysis for the WorldHotels reporting unit in both 2024 and 2023. As of November 30, 2024 and November 30, 2023, the Company determined that the fair value of the WorldHotels reporting unit exceeded the carrying value and no impairment was recorded. The Company performed a qualitative impairment analysis for the AutoClerk reporting unit during both 2024 and 2023, concluding that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount (see note 15).
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, goodwill is allocated to two specific reporting units within the organization. These units are WorldHotels and AutoClerk. Goodwill, in accounting terms, represents the intangible assets of a business, such as its brand reputation, customer relationships, and proprietary intellectual property, that contribute to its overall value.
The allocation of goodwill to WorldHotels and AutoClerk suggests that Best Western views these units as distinct entities with their own measurable goodwill. This allocation is important for financial reporting and impairment testing purposes.
The document further indicates that Best Western performed a quantitative impairment analysis for the WorldHotels reporting unit in both 2024 and 2023, determining that the fair value of WorldHotels exceeded its carrying value, meaning no impairment was recorded. In contrast, a qualitative impairment analysis was conducted for the AutoClerk reporting unit during the same periods, concluding that the fair value of AutoClerk was likely greater than its carrying amount. These analyses are crucial for ensuring that the value of these assets is accurately reflected on Best Western's financial statements.