What is the present value of the lease liability for C12 Group, as calculated in the table?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
5 years in 2024 and 1.16 years in 2023. The weighted-average discount rate was 2.62% in 2024 and 1.08% in 2023.
Future commitments relating to these lease agreements are as follows at December 31, 2024:
| 2025 | $ | 39,207 |
|---|---|---|
| 202 |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, C12 Group's present value of lease liability is calculated based on future minimum lease payments, less any imputed interest. The present value of lease liability represents the discounted value of future lease payments, reflecting the time value of money. This accounting treatment is standard for operating leases with terms greater than 12 months.
For the year 2025, the table provided shows a breakdown of future lease payments. The total minimum future payments amount to $59,632. After deducting imputed interest of $2,690, the present value of the lease liability is calculated to be $56,942. This figure represents the liability C12 Group has on its books for its lease obligations, discounted to its current worth.
A prospective franchisee should understand that these lease liabilities reflect C12 Group's obligations for office space and equipment. The company recognizes operating leases with terms greater than 12 months as lease assets and obligations at the lease commencement date. The company uses the risk-free discount rate, according to the company's elected policy for this class of assets. Understanding the present value of lease liabilities helps in assessing the overall financial health and obligations of C12 Group.