What was the accumulated amortization for Chem Dry's patented technology as of December 31, 2023?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
| 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||
| Amortized intangible assets: | |||||||||
| Patented technology | 7,600 | 4,886 | 7,650 | 3,801 | 7,600 | 2,714 |
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, as of December 31, 2023, the accumulated amortization for its patented technology was $4,886,000. This figure represents the total amount of amortization expense that has been recognized against the value of Chem Dry's patented technology up to that date. Amortization is the systematic allocation of the cost of an intangible asset (like patented technology) over its useful life.
For a prospective Chem Dry franchisee, this information provides insight into how Chem Dry values and accounts for its intangible assets. The patented technology is a key component of Chem Dry's business model, and understanding its amortization schedule can help franchisees assess the financial health and stability of the franchisor. It's important to note that this amortization expense is a non-cash expense, meaning it doesn't represent an actual cash outflow, but it does impact Chem Dry's reported profits.
The FDD also includes the gross carrying amount of the patented technology, which was $7,600,000 as of December 31, 2023. The difference between the gross carrying amount and the accumulated amortization represents the net book value of the patented technology on Chem Dry's balance sheet. This net book value reflects the remaining economic value of the patented technology that has not yet been expensed.
Reviewing these figures in comparison to previous years (2022 and 2021) can reveal trends in Chem Dry's investment in and utilization of its patented technology. A prospective franchisee should consider these trends and discuss with Chem Dry the expected future benefits and amortization schedule of the patented technology to fully understand its impact on the franchisor's financial performance.