What is the depreciation period for buildings and furniture/equipment owned by a Crowne Plaza franchise?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and equipment are stated at cost less accumulated depreciation and any impairment charges. Expenditures for replacements and major improvements are capitalized and depreciated.
Repair and maintenance costs are expensed as incurred. Land is not depreciated. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets: buildings – 30 to 50 years, and furniture and equipment 3 to 25 years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining lease term.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, the company uses the straight-line method to depreciate assets over their estimated useful lives. For buildings, the depreciation period is between 30 to 50 years. Furniture and equipment are depreciated over a period of 3 to 25 years.
This means that a Crowne Plaza franchisee can deduct a portion of the cost of these assets each year over the specified period, which can help reduce their taxable income. The specific depreciation period chosen within these ranges can impact the amount of the deduction each year. A shorter depreciation period will result in larger deductions in the early years, while a longer period will spread the deductions out over a longer time.
It's important to note that land is not depreciated, and leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining lease term. Franchisees should consult with a financial professional to determine the most appropriate depreciation method and period for their specific circumstances, as this can have a significant impact on their financial statements and tax liabilities.