How often does Bft test for impairment of trademarks with an indefinite life?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
o write-offs of uncollectible amounts during the year ended December 31, 2024. As of December 31, 2023, no allowance for expected credit losses was recorded.
Property and equipment, net – Property and equipment includes software and digital platform and are carried at cost less accumulated depreciation. Depreciation is recognized on a straight-line method, based on the following estimated useful lives:
Software and digital platform 3-5 years
Software and digital platform consist primarily of costs associated with web development projects. The Company capitalizes eligible costs to acquire, develop, or modify digital platforms that are incurred subsequent to the preliminary project stage. Depreciation of these assets begins upon the initial usage of the digital platforms.
The cost and accumulated depreciation of assets sold or retired are removed from the accounts and any gain or loss is included in th
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the company tests for impairment of trademarks with an indefinite life on an annual basis. However, Bft may conduct these tests sooner if events or circumstances suggest that the trademarks might be impaired.
To determine if impairment is necessary, Bft first assesses qualitative factors. If these factors indicate that it is more likely than not that the fair value of the trademarks is less than their carrying amount, further analysis is performed. This analysis involves a two-step process comparing the fair value to the carrying value of the trademarks. Bft determines the estimated fair value using a relief from royalty approach.
If the carrying amount of the trademarks exceeds their fair value, Bft impairs the trademarks to their fair value. Trademark impairments of $251 and $0 were recorded for the periods ended December 31, 2024 and 2023, respectively. This indicates that the value of Bft's trademarks is regularly assessed and adjusted to reflect their current market value, which can affect the company's financial statements.