For Petro Stopping Center, what intangible assets, other than goodwill, are included in the statement?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Intangible assets, other than goodwill, include expenditure on the exploration for and evaluation of oil and natural gas resources, biogas rights agreements, digital assets, patents, licenses and trademarks and are stated at the amount initially recognized, less accumulated amortization and accumulated impairment losses.
Intangible assets are carried initially at cost unless acquired as part of a business combination. Any such asset is measured at fair value at the date of the business combination and is recognized separately from goodwill if the asset is separable or arises from contractual or other legal rights.
Intangible assets with a finite life, other than capitalized exploration and appraisal costs as described below, are amortized on a straight-line basis over their expected useful lives. For patents, licenses and trademarks, expected useful life is the shorter of the duration of the legal agreement and economic useful life, and can range from three to fifteen years. The expected useful life of biogas rights agreements is the shorter of the duration of the legal agreement and economic useful life and can be up to 50 years. Digital asset costs generally have a useful life of three to five years.
Source: Item 23 — RECEIPTS **RECEIPTS (FDD pages 87–131)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, intangible assets, excluding goodwill, encompass several categories. These include expenditures related to the exploration and evaluation of oil and natural gas resources, biogas rights agreements, digital assets, patents, licenses, and trademarks. These assets are initially recorded at cost, unless they are acquired as part of a business combination, in which case they are measured at fair value on the acquisition date, provided they can be separated or arise from contractual or legal rights.
Petro Stopping Center amortizes intangible assets with a finite life, excluding capitalized exploration and appraisal costs, using the straight-line method over their expected useful lives. The useful life for patents, licenses, and trademarks is the shorter of the legal agreement's duration and the asset's economic life, typically ranging from three to fifteen years. Biogas rights agreements have a similar approach, with useful lives extending up to 50 years. Digital asset costs are generally amortized over three to five years.
Prospective franchisees should note that the valuation and amortization of these intangible assets can significantly impact the financial statements of Petro Stopping Center. Understanding the useful lives and amortization methods is crucial for assessing the company's financial performance and future profitability. Additionally, the FDD highlights that the energy transition may affect the future development or viability of exploration prospects, which could impact the recoverability of exploration and appraisal intangible assets.