How will any impairment loss be measured by Face Foundrie regarding long-lived assets?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Long-lived assets will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Any impairment loss will be measured by the difference between the fair value of an asset and its carrying amount, and will be recognized in the period that the recognition criteria are first applied and met.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 73)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the company will review long-lived assets for impairment when events or changes in circumstances suggest that the asset's carrying amount may not be recoverable. If impairment is indicated, the loss will be measured by the difference between the fair value of the asset and its carrying amount. The impairment loss will be recognized in the period when the recognition criteria are first applied and met.
For a prospective Face Foundrie franchisee, this means that if the value of assets like equipment or leasehold improvements decreases significantly, Face Foundrie will account for this loss on its financial statements. This accounting practice ensures that the financial statements accurately reflect the value of Face Foundrie's assets.
It is important to note that this policy applies to Face Foundrie's own assets and liabilities. Franchisees should consult with their own financial advisors and accountants to understand how impairment losses might affect their individual franchise operations and financial statements.