What was the loss on disposal of equipment for Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
included in accrued expenses on the balance sheets. As of December 31, 2022 and 2021, there were no accrued advertising expenses, as the Company spent more in advertising than it recognized as advertising revenue from its franchisees.
GOLDEN KRUST FRANCHISING, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
Accounts Receivable:
The Company's accounts receivable are recorded net of an allowance for doubtful accounts and primarily consist of amounts due from franchisees with whom the Company has franchise agreements. The carrying amounts of accounts receivable are reduced by an allowance that reflects management's best estimate of the amounts that may not be collected based on an analysis of historical collection experience and/or age of outstanding receivables. After all attempts to collect accounts receivable have failed, the balances are expensed against the allowance.
Inventory:
Inventory consists of Company owned franchise food, beverage, and packing, and is stated at the lower of cost or net realizable value, determined on the first-in, first-out basis.
Property and Equipment:
Property and equipment are carried at cost less accumulated depreciation and amortization. Maintenance, repairs and minor renewal costs are charged to operations as incurred; major renewals or improvements over $5,000 are capitalized. Upon sale or retirement of property and equipment, the Company removes the related costs and accumulated depreciation from the accounts and any gain or loss is included in the results of current operations. Depreciation is computed on a straight-line basis over the estimated useful life of the respective assets, which typically range from five to ten years. Leasehold improvements are amortized over the life of the lease agreement of the estimated useful life of the leasehold improvement, whichever is shorter.
Fair Value Measurement:
The Fair Value Measurements section of the FASB Accounting Standards Codification establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs t
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 consolidated statements of operations include information on revenues, costs, and expenses, but do not explicitly list "loss on disposal of equipment" as a separate line item. Instead, the disposal of equipment is addressed in Note 2 within the summary of significant accounting policies.
Specifically, the accounting policy states that when property and equipment are sold or retired, Golden Krust Caribbean Restaurant removes the related costs and accumulated depreciation from their accounts. Any resulting gain or loss is then included in the current operations' results. This means that any loss from disposal of equipment is not reported as a distinct figure but is incorporated into the overall financial performance for the year.
For a prospective franchisee, this means that while the FDD provides a detailed overview of the company's accounting practices, specific details like the loss on disposal of equipment are not separately disclosed. To gain a clearer understanding of these specific expenses, a potential franchisee should consider asking Golden Krust Caribbean Restaurant for more granular financial data during their due diligence process.