USA Franchise Fee on Balance Sheet


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My client purchased an existing Franchise business (insurance) from another franchisee. The purchase cost was a lumpsum of $200,000.
This included all FFE and the book of business (Goodwill). Also, the previous owner (the seller) paid for the franchise cost of $40,000 initially when he had started the business 5 years ago.
Question:
In preparing the balance sheet of my client (the buyer)- Out of the $200k asset, can I assign $40,000 of franchise fees as an intangible asset?
Note that - My client (the buyer) did not pay any franchise fees to the seller or to the Franchisor.
 
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The original franchisee would have recorded the franchise fee as an intangible asset on the balance sheet. The franchisee would have then amortized the franchise fee based on expected life of the franchise and the franchise fee. If the buyer paid a franchise transfer fee to the franchisor that transfer fee would be amortizable for the buyer.
 

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