Under what circumstances does Buildingstars review long-lived assets for impairment?

According to Buildingstars' 2025 Franchise Disclosure Document, the company reviews long-lived assets for impairment when events or circumstances suggest that the carrying value of those assets may not be fully recoverable. Impairment is recognized if the sum of undiscounted estimated future cash flows expected from the assets' use is less than their carrying value. If impairment is recognized, the carrying value of the impaired asset is reduced to its fair value.

In simpler terms, Buildingstars assesses whether its long-term assets (like equipment or property) are worth what's stated on the balance sheet. This review is triggered by specific events or changes in circumstances that indicate the asset's value might have declined.

For a prospective Buildingstars franchisee, this accounting practice is important because it affects the financial health of the company. If Buildingstars frequently recognizes impairment losses, it could signal underlying issues with the performance or value of its assets, which could indirectly impact the support and services provided to franchisees. While franchisees typically do not directly manage these assets, the overall financial stability of the franchisor is a key consideration.