How does Brightstar Care recognize lease expense for operating leases?

According to Brightstar Care's 2025 Franchise Disclosure Document, the company recognizes lease expenses for operating leases on a straight-line basis over the lease term. This means that the total lease expense is divided evenly over the duration of the lease, providing a consistent expense amount each period. Variable lease payments, however, are expensed in the period in which the obligation for those payments is incurred, meaning these costs are recognized when they actually happen.

Brightstar Care has also elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component when calculating right-of-use (ROU) assets and lease liabilities for all classes of leased assets. This simplifies the accounting process by treating these combined costs as a single lease expense.

For leases with a term of 12 months or less at the commencement date, Brightstar Care expenses these on a straight-line basis over the lease term. These short-term leases do not result in the recognition of a ROU asset or lease liability. This treatment is common for short-term leases, as the impact on the financial statements is generally not significant enough to warrant the more complex accounting treatment required for longer-term leases.