What was the total value of Even Hotels' contract assets in the later year presented in the table?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
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11. Notes receivable
Notes receivable principally comprises loans to hotel owners.
In December 2023, the Comp
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, contract assets are comprised of amounts paid to hotel owners to secure franchise agreements, also known as "key money." These assets are initially recorded and then recognized as a deduction to franchise royalty fee revenue over the initial term of the agreement. The FDD states that in December 2023, Even Hotels funded a mezzanine loan of $40 million for a new Kimpton hotel in New York City. Of this investment, $17.1 million was included within 'contract assets' in the consolidated balance sheets at December 31, 2023.
In August 2024, IHG funded a bridging loan of $30 million to secure a 30-year management agreement for a new-build 700-room InterContinental Hotel in Orlando. $23.0 million is included within 'contract assets' in the consolidated balance sheets. Therefore, the total value of Even Hotels' contract assets at December 31, 2024, which is the later year presented, was $40.1 million ($17.1 million from the Kimpton hotel loan + $23.0 million from the InterContinental Hotel loan).
It's important to note that these contract assets are reviewed for impairment when events or changes in circumstances suggest that their carrying value may not be recoverable. If estimated undiscounted cash flows are less than the carrying value, an impairment loss is charged to the income statement. However, the document states that no impairment loss was recognized in any of the years ended December 31, 2024, 2023, or 2022.