RRS — Fixed and intangible assets
Fixed asset depreciation, franchise fees, deferred financing fees, franchise agreements, goodwill, security deposits, and ERTC tracking for Rackson Restaurants (E01).
Seven workpapers covering the RRS long-lived assets and the long-running ERTC schedule.
Source: Rackson_Workpaper_Instructions.docx — Part I, Fixed & Intangible Assets.
16600 — Fixed asset depreciation
Owner: Betsy — moving to quarterly
Compares net asset values between Asset Keeper (Rackson's fixed asset system) and the Intacct GL for all asset categories — Buildings 15100, Leasehold Improvements 15300, Furniture & Fixtures 15400, Equipment, and others.
Run the asset report from Asset Keeper as of the period end date. Export the Current Value Per Asset Keeper for each GL account.
Run the Intacct trial balance or dimension balance report for all fixed asset accounts. Record Current Value Per Financials in the workpaper.
The Diff column calculates the variance. Any non-zero difference must be investigated. Common causes: assets added in Intacct but not yet in Asset Keeper, disposals recorded in one system only, or rounding.
For any difference, trace to the asset record level and post a correcting JE (DR/CR the relevant fixed asset and accumulated depreciation accounts).
Verify the depreciation and amortization amounts in Intacct match Asset Keeper's period depreciation run.
This review is now quarterly — but do not skip it. A full reconciliation is required at the quarter. Document any differences identified and the steps taken to resolve them before the financials are sent.
17900 / 17100 — Franchise fees
Owner: Betsy
Amortizes franchise fees (initial license fees) paid to BKC over the 20-year franchise term for each store, straight-line per period.
Per-period amortization for each store is fixed and pre-calculated in the workpaper — illustrative examples: BK 101 $1,548.24/period; BK 114 $559.41/period; BK 549 $692.72/period.
If a new franchise agreement is signed during the period, add a row for the store with the fee amount, start date, end date, calculated term in periods, and per-period amortization. Begin amortizing in the period the agreement is effective.
Run the GL detail for acct 17100 and confirm period activity matches the scheduled amortization. Confirm net book value (cost less accumulated amortization) agrees to the GL.
The Check column verifies that total amortization scheduled does not exceed original cost — confirm this is $0 or a rounding amount for all stores.
Amortization schedules for these balances are provided by the client (Mike) and updated when he sends a revision. PBI does not independently calculate the amortization. These relate to franchise fees recognized on the balance sheet in connection with prior store acquisitions — PBI maintains supporting documentation for each store added through acquisition.
17910 / 17600 — Deferred financing fees
Owner: Betsy
Amortizes the CONA Term Loan closing costs — $1,358,800 over 5 years, straight-line at $22,646.67 per period (2026 rate).
Confirm the period amortization of $22,646.67 posted as the RJE to acct 17910 (accumulated amortization) / acct 17600 (net deferred financing asset). The entry is DR Amortization Expense (interest expense or contra) / CR 17910.
Confirm the ending net balance (17600 cost $1,358,800 less accumulated 17910) agrees to the Intacct GL. Illustrative: as of P5 2026, accumulated amortization should be $543,520 (2 full years) plus P1–P5 2026 amortization ($22,646.67 × 5 = $113,233).
No updates needed unless the loan is modified or refinanced. A historical ~15-cent rounding difference is known and is not a concern.
17920 / 17200 — Franchise agreements (intangible)
Owner: Betsy
Amortizes the fair value of franchise agreements (BKC license intangibles acquired with the FLAME/RRS acquisition) over their remaining lease terms — typically 12–20 years.
Each store has a fixed per-period amortization calculated from the acquisition fair value and remaining term — illustrative: BK 101 $2,126.56/period; BK 114 $1,901.98/period; BK 280 $2,874.70/period.
When a store closes or a franchise agreement expires, remove the remaining net book value via a write-off JE and note the disposition in the workpaper.
Confirm the GL balance for acct 17200 — net of accumulated amortization in 17910 if combined, or a separate contra account — agrees to the sum of net book values in the workpaper.
Also client-provided (Mike); typically set at the start of the year with updates only if terms change during the year.
17930 / 17500 — Goodwill
Owner: Betsy
Amortizes Rackson goodwill — $15,218,820 from the 2020 acquisition — straight-line over 10 years at $1,521,882/year ($117,068/period).
Confirm the period amortization of approximately $117,068 posted. Confirm the exact per-period amount from the workpaper.
Confirm ending accumulated amortization and net goodwill balance agree to the Intacct GL for acct 17500 and the contra account.
Goodwill is fully amortized by 2030. Track remaining periods and note when the balance will hit zero.
No impairment assessment is recorded in this workpaper. Escalate any indicators of impairment to Mike.
18100 — Security deposits
Owner: Betsy
Schedules security deposits paid to landlords and utilities by store. These are long-term assets and rarely change unless a new location opens or a lease terminates.
Confirm the GL balance for acct 18100 matches the workpaper total. Common items: Bay Plaza (store 6384), various Artesian Water and South Jersey Gas deposits, PECO deposit (store 10405).
When a new deposit is paid (e.g. new lease signed), add a row with store, amount, GL date, vendor, and notes. Post DR 18100 / CR Cash.
When a deposit is returned on lease termination, remove the row and post DR Cash / CR 18100. If a portion is applied to final rent or damages, code accordingly.
Caitlin is generally proactive about flagging issues here, so this account has historically required little independent digging. It is still reviewed every period — these balances are relatively young (the current population hasn't been through a full lease cycle) and it isn't yet clear how substantial future write-offs might be. Roughly 10 minutes to review.
19999 — ERTC tracking
Owner: Jeff / Jonah
Tracks Employee Retention Tax Credit filings, IRS payments received, CTI fee payments, and the net gain/interest attributable to Rackson by entity and quarter.
When an IRS ERTC refund check or ACH is received, record the received date, amount, and IRS interest in the appropriate columns. Confirm type (Check versus ACH).
Record the CTI fee payment (original plus interest component) in the CTI columns. The net amount after the CTI fee is the amount recorded to income.
Confirm the amount transferred to the TD Money Market account and the date, per the "Move to TD MM Account" column.
The Rackson Interest column tracks IRS interest earned — confirm how this is coded for tax purposes with Jeff.
Confirm filed-but-not-received amounts for RRS (Q2 2020 through Q2 2021 as applicable) remain on the schedule until received. All received amounts should have a "Paid?" date confirmed.
ERTC is a long-running item. If any IRS notices are received (examinations, offsets), escalate to Mike and legal immediately. The IRS has been asserting additional scrutiny on ERTC claims.
This schedule stays flat for almost the entire year — it is only updated once annually, when the ERTC-related revenue recognition adjustment comes in. The client's auditors send the adjustment; PBI books the schedule to match what the auditors provide rather than independently recalculating the recognition. The account is literally named 19999 - Rackson ERTC Tracking in the balance sheet folder — use "ERTC," not a generic "RTC," when searching for or discussing it.
Related
- Other assets review — the reviewer's treatment of deposits, rebates, and ERTC
- Debt schedules — the CONA facility behind the deferred financing fees
- Franchise fees and amortization review