What was the amount of deferred income tax assets for 1-800-GOT-JUNK? as of May 31, 2025?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
May 31 December 31
Deferred income tax assets: Deferred revenue $ 261,027 $ 257,678 Accrued license fee 688,648 670,450 Allowance for credit losses 28,351 28,351 Non-operating loss 986,095 1,044,395 Other 189,674 212,628
$ 2,153,795 $ 2,213,502
The LLC has non-capital losses totalling $3,687,912 (December 31, 2024 - $3,905,947) which are available to reduce its taxable income in future years. The non-capital losses can be carried forward indefinitely, but the loss utilization will be limited to 80% of taxable income. Deferred income tax assets are carried at their estimated net realizable value. Management considers the scheduled realization of deferred income tax assets, projected future taxable income and tax planning strategies when assessing net realizable value. Carrying values off deferred income tax assets are subject to change in the event that management’s estimates of taxable income through the carry-forward period change.
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, as of May 31, 2025, the total deferred income tax assets amounted to $2,153,795. This figure represents the net income tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for income tax purposes. These deferred income tax assets include several components, such as deferred revenue, accrued license fees, allowance for credit losses, non-operating loss, and other items.
The FDD also notes that 1-800-GOT-JUNK? had non-capital losses totaling $3,687,912 as of May 31, 2025, which are available to reduce its taxable income in future years. These losses can be carried forward indefinitely; however, their utilization is limited to 80% of taxable income. This carry-forward provision can be a significant benefit for 1-800-GOT-JUNK?, allowing it to offset future profits with these existing losses, potentially reducing its tax burden.
The deferred income tax assets are carried at their estimated net realizable value, which is determined by 1-800-GOT-JUNK?'s management based on the scheduled realization of these assets, projected future taxable income, and tax planning strategies. It is important to note that these carrying values are subject to change if management's estimates of taxable income during the carry-forward period are revised. This indicates that the actual value of these assets can fluctuate based on the company's financial performance and tax strategies.