What depreciation method does Craters & Freighters use for office equipment?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and equipment are stated at cost. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the years incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation of property and equipment is provided for in amounts sufficient to relate the cost of depreciable assets to operations over the following methods and estimated useful lives.
The useful lives of property and equipment for purposes of computing depreciation are:
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, the company depreciates property and equipment using methods sufficient to allocate the cost of depreciable assets over their useful lives. While the document specifies that property and equipment are recorded at cost, and it details how additions, betterments, repairs, and maintenance are handled, it does not explicitly state the depreciation method used for office equipment.
The FDD mentions that when property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts, with any gain or loss included in income. The document also lists the useful lives of property and equipment for computing depreciation, but it does not specify the exact method used, such as straight-line, declining balance, or sum-of-the-years' digits.
Therefore, while the FDD provides information on how Craters & Freighters handles property and equipment in its financial statements, it lacks specific details on the depreciation method applied to office equipment. A prospective franchisee should seek clarification from Craters & Freighters regarding the specific depreciation method used for office equipment to fully understand the financial implications.