What was the accumulated amortization for definite-lived software for Dq Treat in 2023?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
s reacquired prior to January 1, 2005, are classified in the consolidated balance sheets as goodwill. The Codification requires franchise rights reacquired subsequent to January 1, 2005, to be recognized as an intangible asset apart from goodwill. Intangibles include any reacquired franchise rights and trademarks/trade names acquired after January 1, 2005.
The Company tests goodwill and indefinite lived intangible assets for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired, based on several factors, including operating results, business plans, and future estimated cash f
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, the accumulated amortization for definite-lived software in 2023 was $3,034. This figure represents the total amount of amortization expense that has been recognized against the cost of the software up to the end of 2023. Amortization is the systematic allocation of the cost of an intangible asset (like software) over its useful life. In this case, the 'definite-lived' designation means the software has a specific, finite period over which it is expected to generate revenue for Dq Treat.
For a prospective Dq Treat franchisee, understanding accumulated amortization is crucial for assessing the net value of assets and the overall financial health of the franchise system. The original cost of the software was $9,788 in 2023, but after subtracting the accumulated amortization of $3,034, the net value is $6,754. This net value reflects the remaining economic benefit that Dq Treat expects to derive from the software in future periods. It's important to note that software typically has a useful life of 3 to 7 years, as stated in the FDD.
Franchisees should pay attention to how Dq Treat manages and amortizes its software assets, as this can impact the reported earnings and financial position of the company. While the FDD states that the company did not record any long-lived asset impairments for the years ended December 31, 2024, 2023, and 2022, it is still important to understand how the company reviews the recoverability of long-lived assets. This is because the company reviews the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.