How often does Black Bear Diner review the carrying value of its long-lived assets?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Use of Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Areas that include significant estimates made by management include, but are not limited to, estimated useful lives and carrying value of long-lived assets and the valuation of intangible assets and goodwill. Actual results could differ significantly from those estimates.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the company's management is required to make estimates and assumptions when preparing financial statements. These estimates affect the reported amounts of assets and liabilities, including the disclosure of contingent assets and liabilities.
Specifically, the areas that include significant estimates by management involve the estimated useful lives and carrying value of long-lived assets, as well as the valuation of intangible assets and goodwill. The FDD indicates that actual results could differ significantly from these estimates.
While the document mentions that the carrying value of long-lived assets is subject to review and estimation, it does not explicitly state how frequently Black Bear Diner conducts these reviews. A prospective franchisee should seek clarification from Black Bear Diner regarding the specific intervals at which these assets are evaluated to fully understand the potential impact on the financial statements.