What method does Canopy Lawn Care use to depreciate property and equipment?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and equipment are recorded at cost. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets (3-10 years). The cost and accumulated depreciation for property and equipment sold, retired, or otherwise disposed of are relieved from the accounts, and resulting gains and losses are recognized currently. Minor maintenance, repairs, and renewals are expensed as incurred.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the company depreciates its property and equipment using the straight-line method. This approach systematically allocates the cost of an asset evenly over its estimated useful life.
The estimated useful lives of these assets range from 3 to 10 years. This means that Canopy Lawn Care will spread the cost of each asset over this period, recognizing a portion of the cost as depreciation expense each year.
Additionally, the document states that when property and equipment are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are recognized at that time. Minor maintenance, repairs, and renewals are expensed as they are incurred, rather than being capitalized and depreciated.