How often does Bw Premier Collection evaluate the potential impairment of goodwill and other intangible assets?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
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 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.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the company evaluates the potential impairment of goodwill and other intangible assets on an annual basis. In assessing these assets for impairment, Bw Premier Collection may choose to initially examine qualitative factors to determine if 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 Bw Premier Collection concludes that the fair value of the assets is not likely less than its carrying value, no further testing is needed. However, if they conclude that the fair value of the assets is likely less than its carrying value, a quantitative impairment test is then performed. For intangible assets, if the carrying value exceeds the fair value, an impairment charge is recognized for the excess. Bw Premier Collection has the option to skip the qualitative assessment and proceed directly to quantitative impairment tests for goodwill and other intangible assets.
Bw Premier Collection determines the fair value of its reporting units and intangible assets using both income and market methods. This annual evaluation is a standard accounting practice to ensure that the value of assets recorded on the company's balance sheet accurately reflects their current worth. For a potential franchisee, this indicates that Bw Premier Collection regularly assesses the financial health and value of its assets, which can provide insight into the company's financial management and stability.