What was the gain on sale of leased properties for Christian Brothers Automotive in the most recent year?
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 the 2025 Christian Brothers Automotive FDD, gains recognized in 2024 related to the amortization of deferred gain on real estate were approximately $853,000. This amount is included within gains on sale-leaseback transactions.
Christian Brothers Automotive defers real estate gains from sale-leaseback agreements and recognizes them over the life of the respective lease. At the end of 2024, the total deferred gain on sale of real estate was approximately $6,300,000, compared to $7,153,000 at the end of 2023.
For a prospective franchisee, this indicates that Christian Brothers Automotive engages in sale-leaseback transactions, which can impact the company's financial statements. The gains from these transactions are not immediately recognized but are instead amortized over the lease term. This accounting practice can affect the reported income in any given year.