What was the amortization of contract liabilities for Sonesta Select Sonesta Essential in 2024?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
ith Customers
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands):
| Decem | ber 31 | , | ||
|---|---|---|---|---|
| 2024 | 2023 | Balance Sheet Classification | ||
| Accounts receivable | $ 9,258 | $ | 7,259 | Accounts Receivable, net |
| Key money | 27,080 | 10,066 | Other long term assets, Prepaid Expenses and other current assets | |
| Capitalized contract costs | 4,912 | 2,460 | Other long term assets, Pre |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 84)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Sonesta Select Sonesta Essential does not explicitly state the amortization of contract liabilities for 2024. However, it does provide information on contract liabilities and capitalized contract costs.
According to the balance sheet data as of December 31, 2024, Sonesta Select Sonesta Essential had contract liabilities of $7,128,000 and capitalized contract costs of $4,912,000. In comparison, for the year 2023, the contract liabilities were $4,944,000 and capitalized contract costs were $2,460,000. These figures reflect the outstanding obligations and costs associated with contracts at the end of each year.
While the FDD provides the ending balances for contract liabilities, it does not detail the specific amortization expense recognized during 2024. Amortization is the process of expensing the cost of an intangible asset over its useful life. For a prospective franchisee, understanding the amortization schedule of contract liabilities is important for projecting future expenses and assessing the financial health of Sonesta Select Sonesta Essential.
To gain a clearer picture, a potential franchisee should ask Sonesta Select Sonesta Essential for the specific amortization expense related to contract liabilities recognized in 2024. This information would provide a more complete understanding of how these liabilities are being accounted for and their impact on the company's financial statements.