How much amortization did Kidokinetics record in 2022?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
| Franchise system development | $ | 108,370 | $ | 108,370 | $ | 108,370 | |--------------------------------|------|-----------|------|-----------|----|-----------| | Internal-use software | | 68,200 | | 68,200 | | 39,200 | | Website | | 8,000 184,570 | | 8,000 184,570 | | 8,000 155,570 | | Less: accumulated amortization | | (159,463) | | (134,017) | | (112,016) | | | $ | 25,107 | $ | 50,553 | $ | 43,554 | Amortization expense for the years ended December 31, 2023, 2022, and 2021 was $25,446, $22,001, and $11,191, respectively. As of December 31, 2023, estimated future amortiza
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the amortization expense recorded for the year ending December 31, 2022, was $22,001. Amortization is the process of spreading out the cost of an intangible asset over its useful life. In Kidokinetics's case, this expense reflects the systematic reduction in the value of intangible assets like franchise rights over time.
For a prospective franchisee, understanding amortization is crucial because it impacts the company's profitability and financial health. While amortization is a non-cash expense, meaning it doesn't involve an actual outflow of cash, it does reduce the company's reported income. Consistent amortization expenses can provide insights into how Kidokinetics manages its assets and investments over the long term.
Franchisees should consider this figure in the context of Kidokinetics's overall financial performance. A stable or increasing amortization expense might indicate consistent investment in intangible assets, while a sudden decrease could signal changes in accounting practices or asset valuations. Reviewing these trends over several years, as presented in the FDD, can offer a more comprehensive understanding of the company's financial strategy.