Where on the Big O Tires consolidated statements is the accretion expense associated with the asset retirement obligations recorded?

According to Big O Tires' 2025 Franchise Disclosure Document, the accretion expense related to asset retirement obligations is recorded as selling, general, and administrative expense within the consolidated statements of operations and comprehensive income. This means that the costs associated with fulfilling lease-end obligations, such as removing signage and equipment to return premises to their original condition, are accounted for in this specific expense category.

Big O Tires utilizes ASC Topic 410, which requires the capitalization of retirement obligation costs as part of the long-lived asset's carrying amount. This cost is then systematically allocated over future periods. The company recognizes that certain leases necessitate returning the premises to their original condition (normal wear and tear excepted) upon lease termination. Consequently, Big O Tires accounts for the fair value of these removal costs at the inception of the lease.

As of March 31, 2025, Big O Tires reported a liability of $2,553 related to asset retirement obligations, a decrease from $4,292 in 2024. This liability is included in noncurrent liabilities on the consolidated balance sheets. The company routinely reviews its methodology and costs associated with asset retirement, particularly for its retail locations and head lease obligation locations, to ensure accurate financial reporting.