How does Craters & Freighters account for property and equipment?

According to Craters & Freighters' 2025 Franchise Disclosure Document, the company states property and equipment at cost. The costs of additions and betterments are capitalized, meaning they are added to the asset's value on the balance sheet. Expenditures for repairs and maintenance are expensed in the years they are incurred, meaning they are deducted from revenue in the income statement for that period.

When items of property and equipment are sold or retired, Craters & Freighters removes the related costs and accumulated depreciation from the accounts. Any gain or loss from the sale or retirement is included in income for that period. Depreciation of property and equipment is provided for in amounts sufficient to relate the cost of depreciable assets to operations over specific methods and estimated useful lives.

For a potential Craters & Freighters franchisee, this accounting policy means that the initial cost of equipment will be recorded as an asset and depreciated over its useful life. This affects the franchisee's financial statements by spreading the cost of the asset over time, rather than expensing it all at once. It's important for franchisees to understand the depreciation methods and useful lives used by Craters & Freighters, as these will impact their reported profits and tax liabilities. Franchisees should consult with a financial professional to fully understand the implications of these accounting policies.