What was the total ROU Asset, net, for Crawlspace Medic as of December 31, 2022?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
f the individual lease terms.
Amounts reported on the balance sheet as of December 31, 2023 and 2022 were as follows:
| Operating Leases: | 2023 | 2022 | |
|---|---|---|---|
| ROU asset | $ 35,224 | $ 35,224 | |
| ROU amortization | (14,090) | (7,045) | |
| Total ROU Asset, Net | $ 21,135 | 28,179 | |
| Lease liability: | |||
| Current portion of lease liability | $ 7,054 | 6, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the total ROU (Right-of-Use) Asset, net, as of December 31, 2022, was $28,179. This figure represents the value of the company's right to use an asset, such as leased property, after accounting for amortization. The ROU asset is initially recorded when Crawlspace Medic adopts the lease standard and reflects the company's rights and obligations under lease agreements.
The ROU asset is calculated by subtracting accumulated amortization from the initial ROU asset value. In 2022, the initial ROU asset was $35,224, and the accumulated ROU amortization was ($7,045), resulting in a net ROU asset of $28,179. This accounting treatment reflects the economic reality of leasing, where a company gains the right to use an asset over a specified period.
For a prospective Crawlspace Medic franchisee, understanding the ROU asset and lease liabilities is crucial, especially if the franchise involves leasing property or equipment. The franchisee should review the lease terms carefully and understand how these assets and liabilities are accounted for in Crawlspace Medic's financial statements. This information can help the franchisee assess the financial obligations associated with leasing and make informed decisions about their investment.