How does Bw Premier Collection depreciate its ROU assets?

According to the 2025 FDD, Bw Premier Collection recognizes a right-of-use (ROU) asset and lease liability to account for its operating leases. These ROU assets represent the company's right to use an underlying asset for the lease term, while lease liabilities represent the obligation to make lease payments arising from the lease. Both are recognized on the commencement date, based on the present value of lease payments over the lease term. The ROU assets are based on the lease liability, increased by prepaid lease payments, and decreased by lease incentives received, which are then amortized through the lease asset as reductions of expense over the lease term.

For Bw Premier Collection, the depreciable life of the ROU assets is limited by the expected lease term, unless the company is reasonably certain of a transfer of title or a purchase option. This means that the asset is depreciated over the period the company expects to use it, aligning the expense with the benefit derived from the asset.

Furthermore, Bw Premier Collection recognizes expense for leases with rent escalations on a straight-line basis over the lease term. Certain leases may require the company to pay for taxes, insurance, maintenance, and other operating expenses associated with the leased asset; however, these amounts are not included in the measurement of the ROU assets and lease liabilities if they are variable in nature. Instead, these variable lease costs are recognized as a variable lease expense when incurred.