Under what circumstances does Focalpoint Coaching review the carrying value of long-lived assets for impairment?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
Long-lived assets:
The Company reviews the carrying value of long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value of the assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. Certain long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the company reviews the carrying value of its long-lived assets for impairment when certain events or changes in circumstances suggest that the asset's carrying value may not be recoverable. This assessment is based on the estimated future cash flows expected from the asset's use and eventual disposition.
If the undiscounted future cash flows are projected to be less than the current carrying value of the asset, Focalpoint Coaching will recognize an impairment loss. This loss is calculated as the difference between the asset's carrying value and its fair value.
Management considers several factors when performing this impairment assessment. These factors include current operating results, market trends, future prospects, and the potential effects of obsolescence, changes in demand, competition, and other relevant economic factors. Additionally, long-lived assets that are intended to be disposed of are reported at the lower of their carrying amount or their fair value, less any costs associated with selling the asset.