What is the estimated useful life of Itan's assets for depreciation purposes?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and equipment - Property and equipment are carried at cost. Depreciation is computed using the straight-line method of depreciation over the assets estimated useful lives of five years. Maintenance and repairs are charged to the expense as incurred; major renewals and betterments are capitalized. When items of property and equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company uses a straight-line method of depreciation for property and equipment. The estimated useful life of these assets is five years. This means that Itan depreciates the cost of its assets evenly over a five-year period.
For a prospective franchisee, understanding the depreciation method and asset life is important for financial planning and tax purposes. The depreciation expense can impact the franchisee's profitability and tax liability. Itan's policy of capitalizing major renewals and betterments, while expensing maintenance and repairs, is a standard accounting practice.
It is important to note that the FDD excerpt refers to Itan's accounting policies, not necessarily those that a franchisee would use. A franchisee should consult with a financial professional to determine the best depreciation method and asset lives for their specific circumstances.