How often does Bhc review its long-lived assets for impairment?

According to Bhc's 2025 Franchise Disclosure Document, the company reviews its long-lived assets for impairment on a periodic basis, at least once a year. This review also occurs whenever events or changes in circumstances suggest that the carrying amount of these assets may not be recoverable. Long-lived intangible assets include trademarks and goodwill. Goodwill represents the excess of cost over fair value of net identified assets acquired in business acquisitions. Bhc has elected the alternative accounting for goodwill amortization along with impairment tests as deemed necessary and appropriate. Trademarks are considered to have indefinite life and impairment is reviewed along with other long-lived assets.

For a prospective franchisee, this means that Bhc assesses the value of its assets, such as trademarks and goodwill, at least annually to ensure their recorded value accurately reflects their current worth. Additionally, Bhc will conduct more frequent reviews if specific events or changes indicate a potential decline in asset value. This practice is important for maintaining accurate financial reporting and ensuring that the company's assets are not overvalued on its balance sheet.

The impairment review process is a standard accounting practice. If an asset's carrying amount is deemed unrecoverable, the company will recognize an impairment loss, reducing the asset's value on the balance sheet to its fair value. This can impact the company's financial performance and may affect investor confidence. Franchisees should be aware of these accounting practices as they provide insight into the financial health and stability of Bhc.