How does Golden Krust Caribbean Restaurant evaluate and adjust goodwill?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
cash flow models, quoted fair values and third-party independent appraisals.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 entity level. As of December 31, 2023 and 2022, the Company concluded that there was no
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 company uses the alternative method for accounting goodwill. This method allows Golden Krust Caribbean Restaurant to amortize goodwill on a straight-line basis over ten years.
Golden Krust Caribbean Restaurant continues to evaluate and adjust goodwill if events or circumstances suggest a permanent decline in value below the current unamortized historical cost. The company conducts goodwill impairment tests at the entity level. As of December 31, 2023, and 2022, Golden Krust Caribbean Restaurant determined that there was no goodwill impairment.
The goodwill is related to a business reorganization that took place on January 1, 2019. The amortization expense for goodwill was $32,748 for both the years ending December 31, 2023, and 2022. This indicates that Golden Krust Caribbean Restaurant is actively monitoring the value of its goodwill and making adjustments as necessary based on specific events and circumstances.