What is the estimated useful life of Itan's assets for depreciation purposes, in years?
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 depreciation method for property and equipment over an estimated useful life of five years. This means that the initial cost of an asset is divided evenly over five years, and that amount is recognized as depreciation expense each year.
For a prospective Itan franchisee, this is relevant when accounting for the salon's assets, such as tanning beds, furniture, and fixtures. The franchisee will depreciate these assets over five years for accounting and tax purposes. This depreciation expense can impact the franchisee's profitability and tax liability.
It's important to note that maintenance and repairs are expensed as incurred, while major renewals and betterments are capitalized, meaning their costs are added to the asset's value and depreciated over the remaining useful life. When assets are sold or retired, any gain or loss is included in the franchisee's income statement.