In what year did Cool Binz recognize an impairment charge for the Delta trade name, and what was the amount?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
ncluded within operating expenses on the consolidated statement of operations.
Intangible Assets
Intangible assets subject to amortization are stated at cost and are amortized using the straightline method over the estimated useful lives of the assets. Intangible assets that are subject to
Notes to Consolidated Financial Statements (dollars in thousands)
amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable.
During 2022, the Company determined that, based on estimated future cash flows, the carrying amount of the Delta trade name and franchi
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, in 2022, the company recognized an impairment loss related to the Delta trade name. Management determined that the carrying amount of the Delta trade name and franchise agreements exceeded their fair value. As a result, Cool Binz recognized an impairment loss of $787 for the Delta trade name. Additionally, an impairment loss of $4,165 was recognized for franchise agreements. These losses were included in operating expenses.
This means that Cool Binz had to write down the value of the Delta trade name and related franchise agreements on its balance sheet because their estimated future value was less than their current book value. This can happen for a variety of reasons, such as poor performance of the Delta brand or changes in market conditions.
It's important to note that the financial statements for 2022 were later restated to correct an error relating to unidentified impairment of the Delta trade name and franchise agreement intangible assets made in 2022. This restatement affected the retained earnings at the beginning of 2023 and certain line items in the 2022 statement of operations. This suggests there may have been some initial miscalculations or oversights in the initial accounting for the Delta trade name and franchise agreements.