When did the business reorganization related to goodwill occur for Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
is measured as the amount by which the long-lived asset (or asset group) exceeds its fair value. Fair value is determined through various valuation techniques including undiscounted cash flow models, quoted fair values and third-party independent appraisals.
Goodwill:
The Company adopted the alternative method of accounting for goodwill which allows it to amortize goodwill on a straight-line basis over a period of ten years. Goodwill continues to be evaluated and adjusted if events and circumstances indicate that a permanent decline in value below the current unamortized historical cost has occurred. The Company tests goodwill impairment at the e
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the business reorganization related to goodwill occurred on January 1, 2019. The document states that the company adopted an alternative method of accounting for goodwill, allowing it to amortize goodwill on a straight-line basis over ten years.
Golden Krust Caribbean Restaurant evaluates and adjusts goodwill if events indicate a permanent decline in value below the current unamortized historical cost. The company tests goodwill impairment at the entity level. As of December 31, 2022, and 2021, the company determined that there was no goodwill impairment.
For a potential franchisee, this indicates that a significant reorganization took place prior to the financial statements provided. The goodwill is being amortized over a ten-year period, which could affect the company's financial performance and reported profits during that time. It also suggests that Golden Krust Caribbean Restaurant management regularly assesses the value of its goodwill to ensure it is accurately reflected on its balance sheet.