What was the deferred gain on sale of leased properties for Christian Brothers Automotive?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
| sheets at December 31: | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | ||||
| Cash and cash equivalents | $ 656,000 | $ | - | ||
| Accounts receivable | 2,157,000 | 1,041,000 | |||
| Prepaid expenses and other assets | 488,000 | - | |||
| Leased properties, net | 129,994,000 | 138,791,000 | |||
| Property and equipment, net | 1,486,000 | - | |||
| Intangible assets, net | 3,936,000 | - | |||
| Goodwill, net | 6,739,000 | - | |||
| Total assets | $ 145,456,000 | $ 139,832,000 | |||
| Accounts payable and accrued expenses | $ 29,908,000 | $ 24,608,000 | |||
| Current portion of long-term debt | 2,084,000 | 4,364,000 | |||
| Long-term debt, net of current portion | 84,422,000 | 85,438,000 | |||
| Subordinated debt | 29,916,000 | 29,067,000 | |||
| Shareholders' equity | (874,000) | (3,645,000) | |||
| Total liabilities and VIE's equity | $ 145,456,000 | $ 139,832,000 | #### 12. Sale-Leaseback Transactions |
The Company defers real estate gains for recognition in future periods related to sale-leaseback agreements of land and buildings on leased properties. This deferred amount is recognized into income over the life of each respective lease. Gains recognized in the 2024 and 2023 consolidated statements of income related to the amortization of deferred gain on real estate were approximately $853,000 and $2,256,000, respectively, included in gains on sale-leaseback transactions. Total deferred gain on sale of real
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, the company defers real estate gains from sale-leaseback agreements, recognizing them over the life of the respective leases. At the end of 2024, the total deferred gain on the sale of real estate was approximately $6,300,000, while at the end of 2023, it was approximately $7,153,000.
The gains recognized in the consolidated statements of income related to the amortization of deferred gain on real estate were approximately $853,000 in 2024 and $2,256,000 in 2023. These amounts were included in gains on sale-leaseback transactions.
For a prospective Christian Brothers Automotive franchisee, this indicates that the company is actively involved in sale-leaseback transactions related to its real estate holdings. The deferred gains and their amortization reflect the accounting treatment of these transactions, which can impact the company's financial statements. Understanding these transactions and their accounting implications can provide insight into Christian Brothers Automotive's financial strategy and performance.