Where on The Standardx's consolidated statements of income is the expense recognized for debt repayment guarantees?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
guarantee. We assess credit risk based on the current and forecasted performance of the underlying property, whether the property owner is current on debt service, the historical performance of the underlying property, and the current market, and we record a separate liability and recognize expense in other income (loss), net or equity earnings (losses) from unconsolidated hospitality ventures on our consolidated statements of income based on the nature of the guarantee.
For additional information about guarantees, see Note 4 and Note 15.
Income Taxes—We account for income taxes to recognize the amount of taxes payable or refundable for the current year and the amount of deferred tax assets and liabilities resulting from the future tax consequences of differences between the financial statements and tax basis of the respective assets and liabilities. We assess the realizability of our deferred tax assets and record a valuation allowance when it is more likely than not that some or all of our deferred tax assets are not realizable.
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the expense recognized for debt repayment guarantees is located in different places on the consolidated statements of income, depending on the nature of the guarantee.
For debt repayment guarantees related to unconsolidated hospitality ventures, the expense is recognized in equity earnings (losses) from unconsolidated hospitality ventures. For guarantees related to managed or franchised hotels, hospitality venture partners, and indemnifications for liabilities incurred prior to sale, the expense is amortized into income in other income (loss), net on The Standardx's consolidated statements of income.
At the inception of the guarantee and on a quarterly basis, The Standardx evaluates the risk of funding under the guarantee. This evaluation includes assessing credit risk based on the current and forecasted performance of the underlying property, whether the property owner is current on debt service, the historical performance of the underlying property, and the current market. Based on this assessment, The Standardx records a separate liability and recognizes the expense in either other income (loss), net, or equity earnings (losses) from unconsolidated hospitality ventures on its consolidated statements of income, depending on the guarantee's nature.