What method does Brain Balance use for computing depreciation and amortization of property and equipment?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
ts to be collected for two franchisee settlements related to two closed franchisees that had unpaid royalty fees. The settlement agreements' do not bear interest and have repayment terms ranging in length from 6 to 36 months. The Company has not recorded an allowance for credit losses as of December 31, 2024, as the Company believes all amounts are collectible.
Property and Equipment
Property and equipment are recorded at cost. The straight-line method is used for computing depreciation and amortization. Assets are depreciated over their estimated useful lives ranging from three to five years. The cost of leasehold improvements is depreciated over the lesser of the length of the related leases or the estimated useful lives of the assets. Costs of maintenance and repairs are charged to expense when incurred.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, Brain Balance uses the straight-line method for calculating depreciation and amortization. This method evenly distributes the cost of an asset over its estimated useful life.
For property and equipment, Brain Balance depreciates assets over a useful life ranging from three to five years. Leasehold improvements are depreciated over the shorter of the lease term or the asset's useful life. Maintenance and repair costs are expensed as they are incurred.
Brain Balance also amortizes acquired intangible assets using the straight-line method over their estimated useful lives. These intangible assets are reviewed for impairment when events suggest their carrying amounts may not be recoverable. This approach ensures that the value of assets is systematically reduced over time, reflecting their use and decline in value.