Does the text specify if the financial statements of Checkersrallys include a schedule of intangible assets?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 21: FINANCIAL STATEMENTS]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Goodwill, Net
Goodwill represents the excess of the consideration transferred over the net of the acquisition date fair values of the assets acquired and liabilities assumed in a business combination. Goodwill is primarily attributable to the deferred tax liability created by the business combination. The Company elected to amortize the goodwill over a 10-year period on a straight-line basis. Impairment testing is performed at the enterprise level upon the occurrence of a triggering event indication that the fair value of the Company might be less than its carrying amount. When a triggering event occurs, the Company has the option to perform a qualitative assessment to determine whether a quantitative test is needed. If that assessment demonstrates that it is more likely than not that an impairment does not exist, no further testing is required. If impairment of goodwill is more likely than not, a quantitative test is required that compares the fair value of the Company with its carrying amount. If the carrying amount exceeds fair value, that amount represents the impairment loss to be recognized, up to the carrying amount of goodwill. Refer to Note 9 - Goodwill and Intangible Assets, Net for further information.
Definite-Lived Intangible Assets
Definite-lived intangible assets, principally franchise agreements are amortized on a straight-line basis over their estimated useful lives of 15 years (see Note 9 - Goodwill and Intangible Assets, Net). The Company assesses definite-live intangibles for impairment on an annual basis, or upon the existence of events or conditions which indicate that the asset may not be recoverable.
[Item 21: FINANCIAL STATEMENTS]
In 2022 and 2021, the Company performed impairment tests of the brands intangible assets by completing a quantitative assessment at the enterprise level which relied upon unobservable inputs (Level 3) as of September 12, 2022, and September 6, 2021, respectively. The impairment tests did not result in any necessary impairment charges and, therefore, no impairment charges were recognized in 2022 and 2021.
[Item 21: FINANCIAL STATEMENTS]
Definite-lived intangible assets, principally franchise agreements are amortized on a straight-line basis over their estimated useful lives of 15 years (see Note 11. Goodwill and Intangible Assets, Net). The Company assesses definite-live intangibles for impairment on an annual basis, or upon the existence of events or conditions which indicate that the asset may not be recoverable.
Indefinite-Lived Intangible Assets
The Company assesses the impairment of indefinite-lived intangible assets, which consist of brand name intangibles, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The annual impairment assessment is performed on the first day of the Company's fourth fiscal quarter. When evaluating potential impairment indicators, we consider the following:
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the financial statements do refer to intangible assets. Specifically, the document mentions definite-lived intangible assets, principally franchise agreements, which are amortized on a straight-line basis over their estimated useful lives of 15 years. There is also reference to Note 9 and Note 11, which provide further information on Goodwill and Intangible Assets.
The financial statements also discuss the impairment testing performed on brands intangible assets. In 2022 and 2021, Checkersrallys performed impairment tests of the brands intangible assets by completing a quantitative assessment at the enterprise level. The impairment tests did not result in any necessary impairment charges, and therefore, no impairment charges were recognized in 2022 and 2021.
Furthermore, the document mentions that the company assesses the impairment of indefinite-lived intangible assets, which consist of brand name intangibles, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The annual impairment assessment is performed on the first day of the Company's fourth fiscal quarter. This indicates that Checkersrallys monitors and evaluates its intangible assets regularly for potential impairment, which is a standard accounting practice.
While the document refers to intangible assets and their treatment, it does not explicitly state whether a separate schedule of intangible assets is included in the financial statements. A prospective franchisee should verify with Checkersrallys if a detailed schedule of intangible assets is available for review to gain a comprehensive understanding of these assets' values and amortization.