What was the carrying amount of Budget's license agreements as of December 31, 2024?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
, which are being amortized over weighted average useful lives of approximately five years and three years, respectively. Differences between the preliminary allocation of purchase prices and the final allocations for these acquisitions were not material.
7. Intangible Assets
Intangible assets consisted of:
| s Carrying | Accu | mulated | Carrying | ss Carrying |
|---|
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the carrying amount of amortized intangible assets related to license agreements as of December 31, 2024, was $306,000. This figure represents the initial cost of the license agreements less any accumulated amortization. Amortization is the systematic allocation of the cost of an intangible asset over its useful life, similar to depreciation for tangible assets. The accumulated amortization for Budget's license agreements as of the same date was $244,000.
The net carrying amount, which is the carrying amount less accumulated amortization, was $62,000. This net figure reflects the book value of the license agreements on Budget's balance sheet at that point in time. For a prospective franchisee, this indicates the value Budget places on its license agreements and how these assets are accounted for in its financial statements.
It's important to note that these figures are part of the consolidated financial statements of Avis Budget Group, Inc., which guarantees Budget's obligations under the license agreements. Reviewing the notes to these financial statements, included as Exhibit G, would provide further details on the nature and terms of these license agreements and the related amortization policies. Understanding these accounting practices can help a franchisee assess the financial stability and asset management strategies of Budget.