What was the amortization of right of use asset for Bor Restoration in 2022?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
OF TH | 257,399 263,246 4 520,649 | | Total Operating Emperiors | | | | | | | NET INCOME | $ 3,179,55 | 9 5 | 386,160 | $ | 420,082 |
| 2023 | 2022 | 2021 | ||
|---|---|---|---|---|
| Beginning owners' equity | $ 638,797 | $ | 304,641 | $ 220,953 |
| Net contributions |
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the amortization of the right-of-use asset for the year 2022 was $46,569. This figure is part of the adjustments made to reconcile net income to net cash provided by operating activities. The right-of-use asset relates to the company's lease obligations, specifically for office space.
The right-of-use (ROU) asset represents Bor Restoration's right to use an underlying asset (in this case, office space) for the lease term. The corresponding lease liability represents the company's obligation to make lease payments arising from the lease. These values are calculated based on the present value of future minimum lease payments over the lease term.
For a prospective Bor Restoration franchisee, understanding the amortization of right-of-use assets is crucial because it reflects how the cost of leased assets is recognized over time. This accounting practice can impact the franchisee's financial statements and should be considered when evaluating the overall financial health and stability of the franchise system. The lease for the office space commenced on August 1, 2021, and runs through July 31, 2024.