For Engel & Volkers, how are maintenance and repair costs for property and equipment handled in the financial statements?

According to Engel & Volkers' 2025 Franchise Disclosure Document, maintenance and repair costs for property and equipment are expensed as they are incurred. This means that Engel & Volkers recognizes these costs on the income statement in the period they occur, rather than capitalizing them as assets. When assets are retired or sold, the net values are removed from the respective accounts, and any gains or losses resulting from the disposal are included in the results of operations.

For a prospective Engel & Volkers franchisee, this accounting practice means that the costs of maintaining and repairing property and equipment will directly impact the profitability reported in their financial statements for each period. Franchisees should budget for these expenses and understand that they will reduce net income in the periods when they are incurred. This approach is typical in many franchise systems, as it provides a straightforward method for accounting for these types of expenses.

Furthermore, this policy ensures that the financial statements accurately reflect the ongoing costs associated with operating the Engel & Volkers business. By expensing these costs immediately, the company avoids overstating the value of its assets and provides a more transparent view of its financial performance. Franchisees should keep detailed records of all maintenance and repair expenses to ensure accurate financial reporting and tax compliance.