What was the amount of capitalized software costs for Engel & Volkers in 2024?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Office equipment | $ 368,454 | $ 352,302 |
| Furniture and fixtures | 570,782 | 564,144 |
| Leasehold improvements | 935,553 | 935,553 |
| 1,874,789 | 1,851,999 | |
| Less: accumulated depreciation and | 1,494,803 | 1,310,118 |
| amortization | ||
| Property and equipment, net | $ 379,986 | $ 541,881 |
Depreciation and amortization expense was $184,686, $216,708 and $144,300 for the years e
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the capitalized software costs for 2024 were $6,201,324, while in 2023 the capitalized software costs were $4,347,574. After deducting accumulated amortization, the net capitalized software was $3,140,323 in 2024 and $2,781,712 in 2023.
Capitalized software represents the costs Engel & Volkers has incurred to develop or purchase software that will benefit the company over multiple years. Instead of expensing the entire cost in the year of purchase, Engel & Volkers amortizes these costs over the software's useful life, reflecting the gradual consumption of the software's value.
The capitalized software costs and related amortization can impact Engel & Volkers's financial statements. Capitalizing these costs increases the company's assets, while amortization expense reduces net income. Franchisees should consider the impact of these accounting practices when evaluating Engel & Volkers's financial performance. Reviewing the notes to the financial statements provides further details on the nature and amortization period of capitalized software.