How often does Floors To Go evaluate goodwill for impairment?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
Goodwill
Goodwill represents the excess of purchase over estimated fair value of the identifiable assets of an entity acquired in 2002. The Company evaluates goodwill for impairment on an annual basis. In completing this evaluation, the Company considers the profitability from those assets and compares its best estimate of future cash flows with the net carrying value of goodwill. Management does not believe there is any impairment of the Company's goodwill as of December 31, 2023 or 2022.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, Floors To Go evaluates goodwill for impairment on an annual basis. Goodwill, in this context, represents the excess of the purchase price over the estimated fair value of identifiable assets acquired in 2002.
During the evaluation, Floors To Go considers the profitability of these assets and compares its best estimate of future cash flows with the net carrying value of goodwill. As of December 31, 2023, and 2022, Floors To Go management did not identify any impairment of the company's goodwill.
For a prospective franchisee, this indicates that Floors To Go regularly assesses the value of its acquired assets and brand reputation. The fact that no impairment was recognized in the two most recent years suggests a stable or growing brand value. However, it is important to note that this evaluation is based on management's estimates and assumptions about future cash flows, which are subject to change.