Under what circumstances does Bw Premier Collection test goodwill for impairment?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
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. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. The Company has not recognized any impairments during the years ended November 30, 2024 and 2023.
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 can choose to initially evaluate qualitative factors to determine if it's likely that the fair value of the reporting unit or intangible assets is less than its carrying amount. If the fair value is likely greater than the carrying amount, no further testing is needed. However, if the fair value is likely less than the carrying amount, 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 difference. Bw Premier Collection has the option to skip the qualitative assessment and proceed directly to quantitative impairment tests for both goodwill and other intangible assets. The fair values of reporting units and intangible assets are determined using income and market methods.
Goodwill has been allocated to two reporting units: WorldHotels and AutoClerk. In 2024 and 2023, Bw Premier Collection performed a quantitative impairment analysis for WorldHotels and determined that the fair value exceeded the carrying value, resulting in no recorded impairment. For AutoClerk, a qualitative impairment analysis was conducted in the same years, concluding that the fair value of the reporting unit was likely greater than its carrying amount. Additionally, Bw Premier Collection reviews long-lived assets for impairment if events or changes suggest that the asset's carrying amount may not be recoverable, comparing the carrying amount to future undiscounted net cash flows. Impairment is recognized if the carrying amount exceeds the asset's estimated fair value. No impairments were recognized during the years ended November 30, 2024 and 2023.