How are other intangible assets valued by Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
the Consolidated Statements of Financial Position.
Other intangible assets include acquired customers, developed technologies, and trademarks and trade names resulting from business acquisitions. Other intangible assets are valued based on their acquisition date fair values and, other than trademarks and trade names which are indefinite-lived, are amortized using the straight-line method over their estimated useful lives, ranging from 7.5 years to 10 years. Other intangible assets are included in other assets, net in the Consolidated Statements of Financial Position.
The Company evaluates the potential impairment of goodwill and other intangible assets annually. In evaluating these assets for impairment, the Company may elect to first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit or the intangible assets is less than its carrying amount. If the conclusion is that the fair value of the assets is not more likely than not less than its carrying value, then no further
November 30, 2024
testing is required. If the conclusion is that the fair value of the assets is more likely than not less than its carrying value, then a quantitative impairment test is performed. For intangible assets, if the carrying value is greater than the fair value of the assets, an impairment charge is recognized for this excess. The Company may elect to forgo the qualitative assessment and move directly to the quantitative impairment tests for goodwill and other intangible assets. The Company determines the fair value of its reporting units and intangible assets using income and market methods.
Goodwill has been allocated to two reporting units: (i) WorldHotels, and (ii) AutoClerk. The Company performed a quantitative impairment analysis for the WorldHotels reporting unit in both 2024 and 2023. As of November 30, 2024 and November 30, 2023, the Company determined that the fair value of the WorldHotels reporting unit exceeded the carrying value and no impairment was recorded. The Company performed a qualitative impairment analysis for the AutoClerk reporting unit during both 2024 and 2023, concluding that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount (see note 15).
(l) Impairment or Disposal of Long-Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, other intangible assets, such as acquired customers, developed technologies, and trademarks and trade names resulting from business acquisitions, are valued based on their acquisition date fair values. These values are determined with the assistance of valuations performed by third-party specialists. For example, in the WorldHotels acquisition, acquired customers were valued at $2.1 million, and trademarks and trade names were valued at $1.3 million. Similarly, in the AutoClerk acquisition, developed technology was valued at $1.9 million, and acquired customers were valued at $1.5 million.
Bw Premier Collection amortizes these intangible assets using the straight-line method over their estimated useful lives, which range from 7.5 years to 10 years, except for trademarks and trade names, which are considered indefinite-lived and not subject to amortization. The amortization expense for definite-life intangible assets was approximately $0.4 million for the years ended November 30, 2024 and 2023, and is estimated to be approximately $0.4 million annually for fiscal years ended 2025 through 2026.
The company also evaluates the potential impairment of these assets annually, using qualitative and quantitative impairment tests. If the carrying value of an intangible asset exceeds its fair value, an impairment charge is recognized for the excess. To estimate the fair value of indefinite-lived trademarks and trade names, Bw Premier Collection uses an income-based approach, specifically the relief-from-royalty approach, considering factors like revenue growth, royalty rate, and discount rate. For the reporting unit, the company uses a combination of income-based and market-based approaches, including discounted cash flow analysis and market multiples of comparable businesses.