How does Dq Treat account for significant improvements that extend the lives of property and equipment?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and Equipment—Property and equipment is stated at historical cost. Depreciation and amortization of property and equipment are computed on the straight-line method over the estimated useful lives of the assets or the remaining term of the lease for leasehold improvements. Estimated useful lives range from 3 to 10 years for equipment, the shorter of 20 years or remaining lease term for
leasehold improvements, and 15 to 40 years for buildings. Significant improvements that extend the lives of property and equipment are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the recorded cost of the assets and their related accumulated depreciation are removed from the Consolidated Balance Sheets and any related gains or losses are included in income.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, property and equipment are recorded at historical cost. Dq Treat uses the straight-line method to calculate depreciation and amortization. The estimated useful lives are 3 to 10 years for equipment, the shorter of 20 years or the remaining lease term for leasehold improvements, and 15 to 40 years for buildings.
Significant improvements that extend the lives of property and equipment are capitalized, meaning the cost is added to the asset's book value and depreciated over its remaining useful life. Regular costs for repairs and maintenance are expensed as they are incurred.
When property is retired or disposed of, Dq Treat removes the recorded cost and related accumulated depreciation from its balance sheets. Any gains or losses from the disposal are included in the company's income statement.