Where on The Standardx's condensed consolidated balance sheet was $38 million of the deferred consideration liability recorded?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
We closed on the transaction on December 27, 2024, paid cash of €359 million (approximately $374 million), and accounted for the transaction as a business combination as we are the primary beneficiary of the VIE (see Note 4). Upon acquisition, we recorded a $58 million deferred consideration liability at fair value, of which $20 million was recorded in accrued expenses and other current liabilities and $38 million was recorded in other long-term liabilities on our condensed consolidated balance sheet. The fair value was estimated using a discounted future cash flow model and includes assumptions and judgments regarding the discount rate, which is primarily a Level Three assumption. We also recorded a $33 million contingent consideration liability at fair value in other long-term liabilities on our condensed consolidated balance sheet. The fair value was estimated using a discounted future cash flow model and includes assumptions and judgments regarding the discount rate, estimated probability of achieving the hotel development milestones, and expected amount and timing of payments, which are primarily Level Three assumptions. Total purchase consideration was determined as follows:
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, upon acquiring an entity, The Standardx recorded a $58 million deferred consideration liability at fair value. Of this amount, $38 million was specifically recorded in other long-term liabilities on The Standardx's condensed consolidated balance sheet.
The remaining $20 million from the $58 million deferred consideration liability was recorded in accrued expenses and other current liabilities. This split indicates how The Standardx accounts for different portions of its financial obligations, categorizing them based on their expected payment timelines.
This accounting treatment is important for prospective franchisees to understand because it reflects how The Standardx manages its financial obligations and integrates acquisitions into its overall financial structure. Understanding these liabilities can provide insight into the company's financial health and its approach to growth and expansion.