How often does The Standardx assess AFS securities for expected credit losses?

According to The Standardx's 2025 Franchise Disclosure Document, AFS (available-for-sale) securities are assessed quarterly for expected credit losses. These credit losses are then recognized in the company's consolidated statements of income under other income (loss), net. This indicates that The Standardx regularly monitors its AFS securities portfolio to account for potential losses.

This quarterly assessment is crucial for The Standardx to maintain an accurate financial picture. By evaluating AFS securities at the individual security level, The Standardx considers factors such as investment strategy, current market conditions, the financial strength of the underlying investments, the term to maturity, and credit rating. This thorough evaluation helps in determining the allowance for credit losses, ensuring that the company's financial statements reflect a realistic valuation of its assets.

For a prospective franchisee, understanding how The Standardx manages its securities and accounts for potential losses can provide insight into the financial stability and risk management practices of the company. While franchisees are not directly involved in these specific financial assessments, the overall financial health of the franchisor can impact the support and resources available to franchisees. Therefore, it is beneficial for potential franchisees to be aware of these practices as part of their due diligence.