How often does Precision Door Service test its domain names for impairment?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
Domain names are stated at their estimated fair value at the date of acquisition, and are not amortized, as their useful lives are considered indefinite, but are subject to annual impairment testing. The Company performed a qualitative assessment of its indefinite lived intangible assets as of October 1, of 2024 and 2023 and concluded it is not more likely than not that the fair value of its domain names is less than the carrying amount and, as such, a quantitative impairment test was not considered necessary.
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 subjects its domain names to annual impairment testing. While the domain names are not amortized due to their indefinite useful lives, Precision Door Service assesses them each year to ensure their value isn't less than the recorded carrying amount.
Specifically, Precision Door Service performs a qualitative assessment of its indefinite-lived intangible assets, including domain names, as of October 1st each year. In both 2024 and 2023, these assessments concluded that it was not likely that the fair value of the domain names was less than the carrying amount, meaning a quantitative impairment test was deemed unnecessary.
For a prospective franchisee, this annual testing indicates that Precision Door Service actively monitors the value of its brand and online presence. While the qualitative assessment has not triggered a quantitative test in recent years, the annual review provides a level of assurance that the company is aware of and responsive to potential changes in the value of its domain names, which are critical assets for online visibility and customer acquisition.