When does Hardees perform its annual goodwill impairment test for its fiscal year?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
We perform our annual goodwill impairment test on the last day of the first accounting period in our fiscal fourth quarter, which was December 2, 2024 for fiscal 2025. In accordance with authoritative guidance, we first assess qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than their carrying amounts. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we then conduct a single-step quantitative goodwill impairment test, consisting of a comparison of the fair values of the reporting units to the carrying values of the reporting units. If the carrying value of a reporting unit exceeds its fair value, then an impairment charge will be recognized for the amount by which the carrying value exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the company conducts its annual goodwill impairment test on the last day of the first accounting period in its fiscal fourth quarter. For fiscal year 2025, this date was December 2, 2024.
Hardees first assesses qualitative factors to determine if it is likely that the fair values of its reporting units are less than their carrying amounts. If this assessment indicates a likelihood that the fair value is less than the carrying amount, Hardees then performs a quantitative goodwill impairment test. This test compares the fair values of the reporting units to their carrying values.
If the carrying value of a reporting unit exceeds its fair value, Hardees will recognize an impairment charge. This charge is for the amount by which the carrying value exceeds the fair value, but it cannot exceed the total amount of goodwill allocated to that reporting unit. This process helps Hardees ensure that its financial statements accurately reflect the value of its assets and goodwill.