On what basis do Afuri Ramen Dumpling and its Parent Company file their U.S. federal income taxes?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Federal income taxes – The accounting for federal income taxes requires an asset and liability approach. Deferred income tax assets and liabilities are provided to recognize the expected future tax consequences of temporary differences between the bases of assets and liabilities for book and tax purposes. The Company files a consolidated federal income tax return with its stockholder, Afuri USA Inc., and there is no agreement for the Company to reimburse the stockholder for any tax incurred.
Management evaluates its income tax positions on a regular basis and believes it has taken no significant uncertain tax positions that could result in additional taxes to the Company. The Company has not recognized any interest or penalties associated with uncertain tax positions.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the company addresses federal income taxes using an asset and liability approach. Deferred income tax assets and liabilities are in place to recognize the expected future tax consequences resulting from temporary differences between the bases of assets and liabilities for both book and tax purposes.
Afuri Ramen Dumpling files a consolidated federal income tax return with its stockholder, Afuri USA Inc. Importantly, there is no agreement in place that requires Afuri Ramen Dumpling to reimburse its stockholder, Afuri USA Inc., for any tax incurred.
Management routinely assesses its income tax positions and believes it has not taken any significant uncertain tax positions that could lead to additional taxes for the company. Furthermore, the company has not recognized any interest or penalties associated with uncertain tax positions.