In Bojangles' financial reporting, during which fiscal year are adjustments to estimated amounts recognized?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Long-lived assets, such as property and equipment, and purchased intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
Based on the 2025 Bojangles Franchise Disclosure Document, the company reviews its long-lived assets, such as property, equipment, and purchased intangible assets subject to depreciation and amortization, for impairment whenever events or changes in circumstances suggest that the carrying amount of an asset may not be recoverable. This review process is part of Bojangles' standard accounting practices to ensure that the value of its assets is accurately reflected in its financial statements. The company's fiscal year ends on the last Sunday of December. The report of independent auditors in the 2025 FDD covers the fiscal years ending December 29, 2024, and December 31, 2023.
If circumstances indicate a possible impairment, Bojangles compares the undiscounted cash flows expected to be generated by the asset to its carrying value. If the carrying value is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. The fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals.
For a prospective Bojangles franchisee, this means that the franchisor, Bojangles Opco, LLC, regularly assesses the value of its assets and may recognize adjustments to estimated amounts during any fiscal year if impairment indicators are present. This practice ensures the financial statements accurately represent the company's financial position. Franchisees should be aware of these accounting practices as they reflect the overall financial health and stability of the Bojangles brand.