How does Canine Dimensions depreciate its automobile fixed asset?

According to Canine Dimensions' 2025 Franchise Disclosure Document, the company capitalizes assets with a useful life exceeding one year. The fixed assets, which include an automobile, are recorded at cost and depreciated using the straight-line method over a period of five years.

For a prospective franchisee, this means that if Canine Dimensions owns a vehicle used in the business, its cost is spread out evenly over five years for accounting purposes. This depreciation method reduces the reported value of the vehicle on the balance sheet each year and reflects the wear and tear or obsolescence of the asset. The 2023 balance sheet shows an automobile with a value of $31,923, accumulated depreciation of $23,271, and net fixed assets of $8,652.

The straight-line depreciation method is a common and straightforward approach, providing a consistent and predictable expense each year. This can help in forecasting and managing the company's financial performance. The FDD also shows that in 2022, the automobile was valued at $31,923 with accumulated depreciation of $19,200 and net fixed assets of $12,723.

It is important to note that this accounting policy applies to Canine Dimensions Franchising, LLC, and individual franchisees may have different depreciation methods or assets. Franchisees should consult with their own financial advisors to determine the most appropriate accounting practices for their specific circumstances.