What methods does Focalpoint Coaching use to compute depreciation of property and equipment?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 1. Nature of Business and Significant Accounting Policies (continued)
Depreciation:
Depreciation of property and equipment is computed on the straight-line and declining balance methods over the estimated useful lives as follows:
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the company calculates depreciation of property and equipment using the straight-line and declining balance methods. The FDD does not specify the estimated useful lives of the assets.
Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. The straight-line method evenly distributes the cost of an asset over its useful life, while the declining balance method results in higher depreciation expense during the earlier years of an asset's life and lower expense later.
For a prospective Focalpoint Coaching franchisee, understanding the depreciation methods used by the company can be important for financial planning and tax purposes. It affects the reported profits and tax liabilities of the company.
It is important to note that the FDD does not provide details on which specific assets are depreciated using each method or the estimated useful lives of those assets. A prospective franchisee should seek clarification from Focalpoint Coaching regarding these details to fully understand the financial implications.