What was the reported provision for income taxes for Atwell Suites?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
of net income within 'gains (losses) on securities' for the years ended December 31, 2023 and 2022. There is no impact on presentation of the consolidated balance sheets.
As a result of this revision, net income increased by $18.8 million and decreased by $40.6 million in the years ended December 31, 2023 and 2022, respectively, whilst other comprehensive income decreased by $18.8 million and increased by $40.6 million in those respective years. These figures are net of related tax of $6.3 million and $(13.6) million respectively.
There is no impact on net cash provided by operating activities, however the statements of cash flows are also revised to reflect the changes to net income and other comprehensive income.
Notes to Consolidated Financial Statements (continued)
1. Description of the Business and Summary of Significant Accounting Policies (continued)
The following summarizes the impact of the revisions (in thousands):
| Year Ended December 31, 2023 | ||||||
|---|---|---|---|---|---|---|
| As Reported | Adjustment | Revised | ||||
| Statement of net income | ||||||
| Gains | $ | - | $ | 25,109 | $ | 25,109 |
| (losses) on securities | ||||||
| Income before income taxes | 971,127 | 25,109 | 996,236 | |||
| Pro |
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites's 2025 Franchise Disclosure Document, the provision for income taxes for the year ending December 31, 2023, was initially reported as $229,264. After adjustments of $6,302, the revised provision for income taxes amounted to $235,566. This figure reflects the estimated income taxes for that specific financial year.
For a prospective Atwell Suites franchisee, understanding the franchisor's income tax provision can offer insights into the overall financial health and profitability of the company. While franchisees are responsible for their own business's tax obligations, the franchisor's tax strategies and liabilities can indirectly affect the brand's financial stability and reputation. A significant change in the tax provision from year to year could signal changes in profitability, tax law interpretations, or accounting practices.
It's also important to note that the company's effective tax rate of 26.14 percent differed from the U.S. Federal Income Tax rate of 21 percent due to taxes imposed by various state and foreign jurisdictions, credits for taxes paid to foreign jurisdictions, valuation allowance on foreign tax credits, permanent tax adjustments, including FDII deduction and System Fund, deferred tax liability adjustments, and changes in uncertain tax positions. Franchisees should consult with financial advisors to understand the implications of these tax-related factors and how they might influence their investment.