What was the depreciation and amortization expense for Expense Reduction Analysts in 2022?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
--| | Furniture and Fixtures | | 15,718 | | 20,163 | | Total Property and Equipment | | 33,748 | | 33,129 | | Less: Accumulated Depreciation | | (14,978) | | (17,588) | | Property and Equipment - Net | $ | 18,770 | $ | 15,541 |
NOTE 4 INTERNAL-USE SOFTWARE
Internal-Use Software is amortized on a straight-line basis over the estimated useful lives of the asset of 10 years. Software development costs of $35,430 and $40,834 were capitalized and included in Internal-Use Software on the balance sheets f
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to the 2025 FDD, Expense Reduction Analysts capitalized software development costs of $40,834 in 2022. However, the asset was still under development during that year. As a result, Expense Reduction Analysts did not record any depreciation expense related to this software in 2022. Depreciation began in 2023, with an expense of $6,832. This indicates that while Expense Reduction Analysts invested in software development, the expense recognition was deferred until the software was actively used in their operations.
For a prospective franchisee, this highlights Expense Reduction Analysts' approach to managing and accounting for internal-use software. The capitalization and subsequent amortization of software development costs suggest a long-term investment perspective. The 10-year amortization period also reflects the estimated useful life of the software, which could be relevant for understanding the company's technology strategy and asset management practices.
It's important to note that the FDD mentions an adjustment to the 2022 financial statements to correct an error in accounting for capitalized software. This adjustment suggests that Expense Reduction Analysts has refined its accounting practices related to software assets. A potential franchisee should inquire about the nature of this adjustment and any implications it might have for understanding the company's financial performance and reporting.
While the FDD provides information on software development costs and their amortization, it does not explicitly state the total depreciation and amortization expense for all assets in 2022. A prospective franchisee may want to request a breakdown of the total depreciation and amortization expense from Expense Reduction Analysts to gain a more comprehensive view of the company's expense structure.