---
title: "RRS — Fixed and intangible assets"
sidebarTitle: "RRS fixed and intangibles"
description: "Fixed asset depreciation, franchise fees, deferred financing fees, franchise agreements, goodwill, security deposits, and ERTC tracking for Rackson Restaurants (E01)."
icon: "building"
---

> **For AI agents:** the complete documentation index is at [llms.txt](/llms.txt). Append `.md` to any page URL for its markdown version.

Seven workpapers covering the RRS long-lived assets and the long-running ERTC schedule.

<Info>
  **Source:** `Rackson_Workpaper_Instructions.docx` — Part I, Fixed & Intangible Assets.
</Info>

## 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.

<Steps>
  <Step title="Pull Asset Keeper">
    Run the asset report from Asset Keeper as of the period end date. Export the **Current Value Per Asset Keeper** for each GL account.
  </Step>
  <Step title="Pull the Intacct values">
    Run the Intacct trial balance or dimension balance report for all fixed asset accounts. Record **Current Value Per Financials** in the workpaper.
  </Step>
  <Step title="Investigate the difference">
    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.
  </Step>
  <Step title="Correct at the asset level">
    For any difference, trace to the asset record level and post a correcting JE (DR/CR the relevant fixed asset and accumulated depreciation accounts).
  </Step>
  <Step title="Confirm the D&A recurring JE">
    Verify the depreciation and amortization amounts in Intacct match Asset Keeper's period depreciation run.
  </Step>
</Steps>

<Warning>
  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**.
</Warning>

## 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.

<Steps>
  <Step title="Confirm the amortization RJE">
    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.
  </Step>
  <Step title="Add new agreements">
    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.**
  </Step>
  <Step title="Tie to the GL">
    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.
  </Step>
  <Step title="Check the cap">
    The **Check** column verifies that total amortization scheduled does not exceed original cost — confirm this is $0 or a rounding amount for all stores.
  </Step>
</Steps>

<Note>
  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.
</Note>

## 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).

<Steps>
  <Step title="Confirm the RJE">
    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.
  </Step>
  <Step title="Verify the net balance">
    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).
  </Step>
</Steps>

<Note>
  No updates needed unless the loan is modified or refinanced. A historical **~15-cent rounding difference** is known and is not a concern.
</Note>

## 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**.

<Steps>
  <Step title="Confirm the amortization RJE">
    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.
  </Step>
  <Step title="Write off on closure or expiry">
    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.
  </Step>
  <Step title="Tie to the GL">
    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.
  </Step>
</Steps>

<Note>
  Also client-provided (Mike); typically set at the start of the year with updates only if terms change during the year.
</Note>

## 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)**.

<Steps>
  <Step title="Confirm the D&A recurring JE">
    Confirm the period amortization of approximately $117,068 posted. Confirm the exact per-period amount from the workpaper.
  </Step>
  <Step title="Tie to the GL">
    Confirm ending accumulated amortization and net goodwill balance agree to the Intacct GL for acct 17500 and the contra account.
  </Step>
  <Step title="Track the run-off">
    Goodwill is **fully amortized by 2030.** Track remaining periods and note when the balance will hit zero.
  </Step>
</Steps>

<Warning>
  **No impairment assessment is recorded in this workpaper.** Escalate any indicators of impairment to Mike.
</Warning>

## 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.

<Steps>
  <Step title="Tie the balance">
    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).
  </Step>
  <Step title="Record new deposits">
    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.
  </Step>
  <Step title="Handle returns">
    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.
  </Step>
</Steps>

<Note>
  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.
</Note>

## 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.

<Steps>
  <Step title="Record refunds received">
    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).
  </Step>
  <Step title="Record the CTI fee">
    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.**
  </Step>
  <Step title="Confirm the transfer">
    Confirm the amount transferred to the TD Money Market account and the date, per the "Move to TD MM Account" column.
  </Step>
  <Step title="Confirm the interest treatment">
    The **Rackson Interest** column tracks IRS interest earned — confirm how this is coded for tax purposes with Jeff.
  </Step>
  <Step title="Track outstanding filings">
    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.
  </Step>
</Steps>

<Warning>
  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.
</Warning>

<Note>
  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.
</Note>

## Related

- [Other assets review](/internal/customers/rackson/review-process/other-assets) — the reviewer's treatment of deposits, rebates, and ERTC
- [Debt schedules](/internal/customers/rackson/debt-schedules) — the CONA facility behind the deferred financing fees
- [Franchise fees and amortization review](/internal/customers/rackson/review-process/other-assets)