How does Expense Reduction Analysts test its indefinite lived license rights for impairment?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's intangible assets, which consist of indefinite lived license rights, are not amortized, but instead tested for impairment at least annually at the reporting unit level. The Company performs this impairment test by first comparing the fair value of its reporting units to their carrying amount. If an indicator of impairment exists based upon comparing the fair value of its reporting units to their carrying amount, the Company would then compare the implied fair value of its license rights to the carrying amount in order to determine the amount of impairment, if any (see Note 5). Based on this analysis there were no impairments of the Company's license rights during the years ended December 31, 2024 and 2023.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts's 2025 Franchise Disclosure Document, the company's intangible assets, which include indefinite lived license rights, are tested for impairment at least annually at the reporting unit level. Expense Reduction Analysts does not amortize these assets. The impairment test involves comparing the fair value of its reporting units to their carrying amount.
If the fair value of the reporting units is less than their carrying amount, indicating a potential impairment, Expense Reduction Analysts then compares the implied fair value of its license rights to their carrying amount. This comparison determines the amount of impairment, if any.
The FDD states that based on this analysis, there were no impairments of Expense Reduction Analysts's license rights during the years ended December 31, 2024 and 2023. This process ensures that the value of the intangible assets is accurately reflected on the company's financial statements.