What is the net value of property and equipment for Closet Storage Concepts?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and equipment are stated at cost. Depreciation of property and equipment for financial reporting purposes is provided using the straight‐line method over their respective estimated useful lives ranging from 5 to 15 years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When property and equipment is sold or otherwise disposed of, the asset account and any accumulated depreciation accounts are relieved, and any gain or loss is included in other income and expense on the income statement.
The carrying amount of all long‐lived assets is evaluated periodically to determine if an adjustment to the depreciation period, or the non‐depreciated balance is warranted. Based on its most recent analysis, the Company believes that no impairment of property and equipment exists.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Closet Storage Concepts does not state the net value of property and equipment. However, it does describe how property and equipment are valued and depreciated for financial reporting purposes.
According to the FDD, Closet Storage Concepts states property and equipment at cost. Depreciation is calculated using the straight-line method over estimated useful lives ranging from 5 to 15 years. The company capitalizes expenditures for major renewals and betterments that extend the useful lives of the assets, while expenses for maintenance and repairs are charged as incurred. When property and equipment is sold or disposed of, the asset and accumulated depreciation accounts are relieved, and any gain or loss is included in the income statement.
The FDD also states that Closet Storage Concepts periodically evaluates the carrying amount of long-lived assets to determine if adjustments to the depreciation period or non-depreciated balance are needed. Based on their most recent analysis, the company believes that no impairment of property and equipment exists.
Because the specific net value is not disclosed, a prospective Closet Storage Concepts franchisee should ask the franchisor directly for the net value of property and equipment to gain a clearer understanding of the company's asset base and financial health. This information would be helpful in assessing the overall financial stability of Closet Storage Concepts.