Where are capitalized Cloud Computing Arrangement (CCA) implementation costs included in Burger King's consolidated balance sheets?

According to Burger King's 2025 Franchise Disclosure Document, the costs associated with implementing Cloud Computing Arrangements (CCA) are treated as capital expenditures, similar to internal-use software costs. These capitalized CCA implementation costs are specifically included within the "Other assets" section of Burger King's consolidated balance sheets. This means that when Burger King incurs expenses to set up and implement cloud computing systems, these costs are not immediately expensed. Instead, they are recorded as assets on the balance sheet.

This accounting treatment has implications for how Burger King's financial performance is perceived. By capitalizing these costs, Burger King spreads the expense over the term of the related hosting agreement. This approach can reduce the impact on Burger King's short-term profitability, as the expense is recognized gradually through amortization. The amortization expense, representing the portion of the capitalized costs recognized in each period, is classified as "General and administrative expenses" in the consolidated statements of operations.

For a prospective Burger King franchisee, understanding this accounting practice provides insight into how Burger King manages its technology investments and reports its financial results. While the franchisee does not directly deal with these consolidated balance sheets, it's helpful to know that Burger King amortizes these costs over the hosting agreement term, including reasonably certain renewal periods. This suggests that Burger King views these technology investments as providing long-term value to the company.