What was the depreciation expense for Cornwell Quality Tools in 2024?
Cornwell_Quality_Tools Franchise · 2025 FDDAnswer from 2025 FDD Document
ion liability. Designated investments have been deposited in a separate account during 2022 and 2021.
Goodwill
The Company recognized $8,483,752 of goodwill related to Cornwell Quality Tools Company's acquisition of CQT Kennedy, LLC. The Company accounts for goodwill in accordance with alternative accounting guidance issued by the FASB. This alternative accounting treatment permits privately held companies to amortize goodwill on a straight-line basis over a period not to exceed 10 years while maintaining compliance with GAAP. Goodwill is reviewed for possible impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the carrying amount is greater than its fair value. Management has determined that there is no impairment of goodwill for the years ended December 31, 2022 and 2021. Amortization expense totaled $848,376 in 2022 and $848,375 in 2021, respectively, and accumulated amortization totaled $5,302,345 at December 31, 2022 and $4,453,969 at December 31, 2021. Goodwill will amortize at the annual amount of $848,376 in 2023, 2024, and 2025, with the remaining amount of $636,279 being amortized in 2026.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Major additions and improvements are charged to the property accounts while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets, are expensed currently.
Source: Item 23 — RECEIPT (FDD pages 101–373)
What This Means (2025 FDD)
According to Cornwell Quality Tools' 2025 Franchise Disclosure Document, the document does not explicitly state the total depreciation expense for 2024. However, it does detail how Cornwell Quality Tools handles depreciation of property, plant, and equipment. These assets are recorded at cost, and depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The costs of major improvements are added to the property accounts, while routine maintenance and repairs are expensed when incurred. When property is retired or disposed of, its cost is removed from the asset account, accumulated depreciation is charged, and any resulting gain or loss is recorded in operations.
While the FDD mentions the method used for calculating depreciation, it does not provide the specific depreciation expense amount for 2024. The document does mention amortization of goodwill, which totaled $848,375 in 2024. This amortization relates to the acquisition of CQT Kennedy, LLC, and is amortized on a straight-line basis. Accumulated amortization totaled $6,999,095 as of December 31, 2024.
To determine the exact depreciation expense for Cornwell Quality Tools in 2024, a prospective franchisee should review the company's complete financial statements or request this information directly from the franchisor. Understanding the depreciation expense can help a franchisee assess the company's financial health and how it manages its assets.