How does Fast Fix Jewelry And Watch Repairs amortize goodwill?
Fast_Fix_Jewelry_And_Watch_Repairs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Goodwill, net at January 1, 2022 | $ 3,832,273 |
|---|---|
| Amortization of goodwill | (617,280) |
| Goodwill, net at December 31, 2022 | 3,214,993 |
| Amortization of goodwill | (617,280) |
| Goodwill, net at December 31, 2023 | $ 2,597,713 |
Goodwill totaled approximately $6,173,000 and accumulated amortization totaled approximately $2,958,000 and $3,575,000 at December
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 37)
What This Means (2025 FDD)
According to Fast Fix Jewelry And Watch Repairs's 2025 Franchise Disclosure Document, the company amortizes goodwill. Goodwill totaled approximately $6,173,000 at December 31, 2023, and accumulated amortization totaled approximately $2,958,000 and $3,575,000 at December 31, 2023 and December 31, 2022, respectively. The company estimates goodwill amortization expense to be approximately $617,300 during each of the years 2024 through 2027 and $128,500 in 2028.
For a potential Fast Fix Jewelry And Watch Repairs franchisee, understanding goodwill amortization is crucial because it affects the company's financial statements and, potentially, the overall financial health of the franchise system. Goodwill typically arises from acquisitions, representing the excess of the purchase price over the fair value of identifiable net assets acquired. Amortizing goodwill means that Fast Fix Jewelry And Watch Repairs systematically expenses the value of goodwill over its estimated useful life, which impacts the company's reported profits.
The fact that Fast Fix Jewelry And Watch Repairs has elected to amortize goodwill indicates they are following a specific accounting alternative available to private companies. This election also means that instead of annually testing goodwill for impairment, they only do so if a triggering event occurs, suggesting a situation where the fair value of the business might be below its carrying amount. This approach can reduce the administrative burden of annual impairment testing but also means that impairment losses might be recognized less frequently but potentially in larger amounts when a triggering event does occur.
Prospective franchisees should be aware of how goodwill is accounted for, as it can influence the perceived financial stability and profitability of Fast Fix Jewelry And Watch Repairs. Understanding the amortization schedule and the conditions under which impairment testing is conducted can provide a more comprehensive view of the company's financial practices and risk management. This information is valuable for making an informed investment decision.