PALM BEACH GARDENS, Fla. (Nov. 10, 2016) — TBC Corp. has had a busy 60th year in business, launching inititiatives to expand tire sales through its Midas International Corp. and SpeeDee Oil Change & Auto Service franchise organizations, revamping and refeshing its retail business and refranchising its last few remaining Big O Tires L.L.C. franchises.
While that was the company's public persona, behind the scenes the company was dealing with pressure from parent Sumitomo Corp. to amp up the pace of recovery from a few off years — a business malaise that forced Sumitomo to record an “impairment loss” of $181 million for the fiscal year ended March 31, 2015.
- This article appears in the Nov. 7 print edition of Tire Business.
According to various investment sources, an impairment loss is defined as the decrease in an asset's net carrying value that exceeds the future undisclosed cash flow it should generate. Net carrying value is an asset's acquisition cost minus depreciation.
Impairment occurs when a company sells or abandons an asset that is no longer beneficial. Impaired assets must be recognized as a loss on the company's income statement.