How does Brightstar Care account for gains or losses on the disposition of property and equipment in its consolidated financial statements?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
For property and equipment that is sold or retired, its cost and accumulated depreciation are removed from the consolidated balance sheets during the period of the disposition and any gain or loss on disposition is credited or charged to operations. Repair and maintenance costs are charged to expense as incurred.
The Company evaluates its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The Company did not identify any impairment of its property and equipment at December 29, 2024 or December 31, 2023.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 117)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, when property and equipment are sold or retired, Brightstar Care removes the asset's cost and accumulated depreciation from its consolidated balance sheets during the period of disposition. Any resulting gain or loss from the disposition is then credited or charged to the company's operations.
Brightstar Care records property and equipment at its historical cost, less any accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the equipment, which ranges from three to seven years, or over the life of the lease, if applicable.
In addition, Brightstar Care assesses its property and equipment for impairment whenever events or changes in circumstances suggest that the carrying amount of the assets may not be recoverable. If the estimated undiscounted future cash flows expected from the use and eventual disposition of an asset are less than its carrying amount, an impairment loss is recognized. The company did not identify any impairment of its property and equipment as of December 29, 2024, or December 31, 2023.