What was the reported value of Kidokinetics' right of use asset on December 31, 2023?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- Operating Lease
During the year ended December 31, 2021, the Company entered into a lease agreement for office space. The lease expires in 2024, with the option to renew. As the Company adopted ASC 842 on January 1, 2022, there are no right of use assets or operating lease liabilities as of December 31, 2021. As of December 31, 2023 and 2022, the Company recorded a right of use asset of $24,593 and $81,087, respectively. As of December 31, 2023 and 2022, the Company had the following current and non-current portions of its operati
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the company recorded a right of use asset of $24,593 as of December 31, 2023. This asset relates to a lease agreement for office space that Kidokinetics entered into during the year ended December 31, 2021. The lease is set to expire in 2024, with an option to renew.
A "right of use" asset represents Kidokinetics' right to use an identified asset (in this case, office space) over the lease term. This accounting treatment is in accordance with ASC 842, which Kidokinetics adopted on January 1, 2022. Prior to adopting ASC 842, there were no right of use assets or operating lease liabilities recorded as of December 31, 2021.
For a prospective Kidokinetics franchisee, this information provides insight into how Kidokinetics accounts for its leases and manages its assets and liabilities. It's important to note that the value of the right of use asset can change over time due to factors such as amortization and lease modifications. Reviewing the financial statements and related notes can help potential franchisees understand the company's financial health and stability.