Under what circumstances does Boulder Designs review long-lived assets for impairment?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Long-lived assets, such as equipment and acquired franchise agreements, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset 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 23 — RECEIPT (FDD pages 50–217)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, the company reviews long-lived assets for impairment under specific circumstances. These assets, which include equipment and acquired franchise agreements, are assessed when events or changes in circumstances suggest that their carrying amount may not be recoverable.
If such circumstances arise, Boulder Designs initiates a test for possible impairment. This test involves comparing the undiscounted cash flows expected to be generated by the asset to its carrying value. Should the carrying value of the long-lived asset be deemed unrecoverable on an undiscounted cash flow basis, the company recognizes an impairment.
The impairment is recognized to the extent that the carrying value of the asset 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, as deemed necessary by Boulder Designs.