How does Precision Door Service assess definite lived intangible assets for impairment?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
For definite lived intangible assets, when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable, the Company evaluates the definite lived intangible assets for impairment by comparing the carrying value to the anticipated future undiscounted cash flows expected to be generated from the use of the intangible assets. If the carrying amount is not recoverable, a loss is recorded in the amount the carrying value exceeds the fair market value of the assets. The Company performed a qualitative assessment of its intangible assets and determined that no indicators of impairment were present for definite lived intangible assets.
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the company evaluates definite lived intangible assets for impairment when events or changes in circumstances suggest that the carrying amount of the asset may not be recoverable. This evaluation involves comparing the carrying value of the intangible assets to the anticipated future undiscounted cash flows expected to be generated from their use.
If the carrying amount is deemed not recoverable, Precision Door Service records a loss. The loss amount is equivalent to the difference between the carrying value and the fair market value of the assets.
The document indicates that Precision Door Service performed a qualitative assessment of its intangible assets and determined that no indicators of impairment were present for definite lived intangible assets as of the date of the assessment. Examples of Precision Door Service's definite lived intangible assets include tradenames, franchise relationships, national accounts, insurance company relationships, customer relationships, re-acquired franchise rights, developed technology and copyrights.