How does Dryject present debt issuance costs?

According to Dryject's 2025 Franchise Disclosure Document, the company adheres to FASB ASC 835-30, which dictates that debt issuance costs are presented as a reduction of the carrying amount of the debt, rather than as an asset. This means that instead of listing debt issuance costs as a separate asset on its balance sheet, Dryject subtracts these costs directly from the total amount of the debt.

Furthermore, the amortization of these debt issuance costs is reported as interest expense in the statement of functional expenses or the statement of income and member's capital. Amortization is the process of gradually writing off the initial cost of an asset over a period. In this case, instead of recognizing the entire debt issuance cost upfront, Dryject spreads the cost over the life of the loan and records a portion of it as interest expense each period.

For a prospective Dryject franchisee, this accounting treatment means that the financial statements will show a lower debt amount and a higher interest expense compared to if the debt issuance costs were treated as an asset. This approach provides a more conservative view of the company's financial position, as it immediately recognizes the cost of obtaining debt rather than deferring it. This also impacts the profitability metrics reported by Dryject, as the amortization expense will reduce the net income.