What were the capitalized debt issuance costs for Management Recruiters at December 31, 2023?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
in substance, multiple awards. The grant date fair value of stock awards is based on the quoted price of our common stock on the grant date. The grant date fair value of option awards is determined using the Black-Scholes valuation model.
Debt Issuance Costs
Debt issuance costs associated with our revolving line of credit is capitalized and presented as prepaid expenses, deposits, and other assets. Because debt issuance costs are related to a line of credit, they are presented as an asset, rather than a
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, capitalized debt issuance costs were approximately $109,000 at December 31, 2023. These costs are associated with Management Recruiters' revolving line of credit and are treated as prepaid expenses, deposits, and other assets on their balance sheet.
Debt issuance costs, because they relate to a line of credit, are presented as an asset rather than a reduction of debt. This means that Management Recruiters accounts for these costs as something that provides future economic benefit, which is typical accounting practice.
Management Recruiters amortizes these debt issuance costs using the straight-line method over the term of the related agreement. Amortization is a systematic way of expensing the cost of an asset over its useful life. The straight-line method means that the same amount of expense is recognized each period until the asset is fully amortized.