What was the reported impairment of intangible assets for Clear Pest Pros after the restatement?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
e items for fiscal year 2022 were affected by the change.
Statement of Operations
Year ended December 31, 2022
| As Previously Reported | As Restated | Effect of Change | |
|---|---|---|---|
| Net Revenue | $ 33,483 | $ 33,483 | $ - |
| Cost of Revenue | 9,055 | 9,055 | - |
| Gross Profit | 24,428 | 24,428 | - |
| Operating Expenses, before impairment | 29,842 | 27,789 | (2,053) |
| Impairment of Goodwill | - | 1,266 | 1,266 |
| Impairment of Intangible Assets | - | 4,952 | 4,952 |
| Operating Loss | (5,414) | (9,579) | (4,165) |
| Total Non-Operating Income | 1,380 | 1,380 | - |
| Loss, | (4,034) | (8,199) | (4,165) |
| before income taxe |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 67)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, the restated impairment of intangible assets was $4,952. This figure appears in the restated financial statements, reflecting adjustments made to correct prior reporting errors or to comply with accounting standard changes. The effect of this change increased the impairment of intangible assets by $4,952.
For a prospective Clear Pest Pros franchisee, understanding the restatement and its impact on the company's financials is crucial. Impairment of intangible assets suggests that the value of assets like trade names or franchise agreements has declined. A significant restatement, as indicated here, could signal underlying issues in the company's financial reporting or business performance.
It is important to note that while the table provides the impairment of intangible assets, additional context can be found in the notes to the consolidated financial statements. During 2022, Clear Pest Pros determined that the carrying amount of the Delta trade name and franchise agreements exceeded their fair value, resulting in impairment losses of $787 and $4,165, respectively. No impairment charge was recognized in 2024 or 2023.
Therefore, a potential franchisee should investigate the reasons behind the impairment and the restatement. Understanding the specific intangible assets affected and the factors contributing to their impairment can provide valuable insights into the risks and opportunities associated with investing in a Clear Pest Pros franchise. Consulting with a financial advisor to review these financial statements is advisable.