What was the amortization of contract liabilities for Sonesta Simply Suites in 2023 (Restated)?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| (dollars in thousands) | ||||
|---|---|---|---|---|
| 2024 | 2023 (Restated) | 2022 | ||
| Cash flows from operating activities: | ||||
| Net income (loss) | $ ( 2,913) | $ 1,477 | $ ( 3,186) | |
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||
| Depreciation and amortization | 489 | 1,691 | 3,506 | |
| Amortization of key money and contract costs | 1,514 | 396 | 7 | |
| Amortization of contract liabilities | 192 | 1,497 | 713 |
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the amortization of contract liabilities in 2023 (Restated) was $1,497,000. This figure is part of the cash flow from operating activities reported in the financial statements.
Amortization of contract liabilities represents the systematic reduction of the value of liabilities associated with contracts over their useful life. For a Sonesta Simply Suites franchisee, this indicates the expense recognized during the year related to the use of contractually obligated services or benefits. This non-cash expense reduces the net income but doesn't involve an actual outflow of cash during the period.
Understanding the amortization of contract liabilities is crucial for assessing the true financial performance of Sonesta Simply Suites. Franchisees should consider this figure when evaluating the overall profitability and cash flow dynamics of the franchise, as it provides insight into how contractual obligations impact the financial statements.