Under what circumstances does Bojangles measure property, plant, and equipment at fair value on a nonrecurring basis?

According to Bojangles' 2025 Franchise Disclosure Document, property, plant, and equipment are measured at fair value on a nonrecurring basis only in specific situations. This nonrecurring measurement primarily occurs when there is evidence of impairment. Impairment, in accounting terms, means that the carrying amount of an asset is higher than its fair value, indicating that the asset's value has declined.

When such impairment is identified, Bojangles calculates the impairment charge by determining the difference between the carrying amount of the assets and their fair value. If the company concludes that impairment exists, the carrying amount of the property, plant, and equipment is then reduced to reflect its fair value. This adjustment ensures that the company's financial statements accurately represent the economic value of its assets.

For a prospective franchisee, this accounting practice means that the value of physical assets like buildings and equipment could be adjusted downward if their market value decreases significantly. This could impact the franchisee's balance sheet and potentially affect financial ratios used by lenders or investors. It is important for franchisees to understand how Bojangles assesses and accounts for potential impairments, as it can have implications for the overall financial health of their franchise.