How often does The Standardx assess HTM securities for expected credit losses?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
HTM securities are assessed for expected credit losses quarterly, and credit losses are recognized in other income (loss), net on our consolidated statements of income.
In determining the allowance for credit losses, we evaluate HTM securities individually due to the unique risks associated with each security, and we consider the financial strength of the underlying assets, including the current and forecasted performance of the property, term to maturity, credit quality of the owner, and current market conditions.
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, HTM (held-to-maturity) securities are assessed for expected credit losses on a quarterly basis. These credit losses are then recognized in other income (loss), net, on The Standardx's consolidated statements of income.
The Standardx evaluates HTM securities individually when determining the allowance for credit losses, taking into account the unique risks associated with each security. Factors considered include the financial strength of the underlying assets, the current and forecasted performance of the property, the term to maturity, the credit quality of the owner, and current market conditions.
This quarterly assessment and individualized evaluation indicate that The Standardx closely monitors its HTM securities portfolio for potential credit risks. This practice is in line with standard accounting procedures, ensuring that the company's financial statements accurately reflect the value of its investments and potential losses. For a prospective franchisee, this suggests that The Standardx manages its financial assets with diligence and attention to detail.