As of December 31, 2023, has Chocolate Bash recognized any impairment loss for long-lived assets?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is present when the sum of the undiscounted estimated future cash flows expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. As of December 31, 2023, December 31, 2022, & December 31, 2021, no impairment loss has been recognized for long-lived assets.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the company reviews long-lived assets for impairment when events suggest that the carrying value of those assets may not be recoverable. Impairment exists if the sum of the undiscounted estimated future cash flows expected from the asset's use is less than its carrying value. If impairment is present, the asset's carrying value is reduced to its fair value.
As of December 31, 2023, December 31, 2022, and December 31, 2021, Chocolate Bash did not recognize any impairment loss for long-lived assets. This means that during these periods, the company believed the value of its assets was fully recoverable and no adjustments were necessary.
For a prospective franchisee, this indicates that Chocolate Bash has maintained the value of its assets over the past three years. It is important to note that this assessment is based on the company's own evaluation and accounting practices, and a potential franchisee should conduct their own due diligence to assess the value and condition of any assets they may acquire as part of the franchise agreement.