How is Itan's property and equipment carried?
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, property and equipment are recorded at their historical cost. Itan utilizes the straight-line depreciation method, allocating the cost of these assets evenly over their estimated useful lives, which is five years. Routine maintenance and repairs are expensed as they are incurred. Significant renewals and improvements that extend the life or value of the asset are capitalized, meaning they are added to the asset's book value and depreciated over time. When property or equipment is sold or retired, Itan removes the original cost and accumulated depreciation from its accounts. Any resulting gain or loss from the disposal is then recognized in the company's income statement. This approach is a standard accounting practice, ensuring that Itan's financial statements accurately reflect the value and usage of its assets over time.