What was the acquisition of property and equipment for Carbones Pizzeria?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Inventories
Inventories consist primarily of items held at the restaurant and are valued at the lower of cost or net realizable value with cost determined using the first-in, first-out method.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization and are depreciated or amortized using the straight-line method. Property and equipment is comprised of furniture and equipment, and vehicles which will be depreciated over five to seven years and leasehold improvements over the shorter of the lease term or the life of the asset.
Notes to Consolidated Financial Statements For the Year Ended October 31, 2024
2. Summary of Significant Accounting Policies (Continued)
Long-Lived Assets
The Company periodically evaluates the net realizable value of long-lived assets, including property and equipment, and intangible assets, relying on a number of factors including operating results, business plans and economic projections, and anticipated future cash flows. An impairment in the carrying value of an asset is recognized when the fair value of the asset is less than its carrying value.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Carbones Pizzeria's accounting policies address property and equipment. The document states that property and equipment are recorded at cost, minus any accumulated depreciation and amortization. The assets are depreciated or amortized using the straight-line method.
According to the FDD, property and equipment include furniture, equipment, and vehicles, which are depreciated over five to seven years. Leasehold improvements are depreciated over the shorter of the lease term or the asset's life.
The FDD also states that Carbones Pizzeria periodically assesses the net realizable value of long-lived assets, including property, equipment, and intangible assets. This evaluation relies on factors such as operating results, business plans, economic projections, and anticipated future cash flows. If the fair value of an asset is less than its carrying value, an impairment loss is recognized.