Under Ben Jerrys' accounting methods, how are deferred tax assets and liabilities recognized?

According to Ben Jerrys' 2025 Franchise Disclosure Document, the company assesses the recoverability of deferred tax assets at each reporting date. If it is deemed more likely than not that some or all of the deferred tax assets will not be realized, a valuation allowance is recognized. This assessment includes analyzing reversing deferred tax liabilities and forecasted pre-tax income from operations.

As of December 31, 2024 and 2023, Ben Jerrys did not record any valuation allowance, meaning they believed their deferred tax assets would be fully realized. The components of deferred tax assets include items such as fixed assets, lease liabilities, deferred revenue, other accruals, state net operating losses (NOL), deferred revenue state taxes, and federal NOL carryforward. Deferred tax liabilities primarily consist of intangible assets and lease assets.

For a prospective Ben Jerrys franchisee, understanding these accounting practices is crucial for interpreting the company's financial statements. The absence of a valuation allowance suggests a positive outlook on the company's ability to utilize its deferred tax assets. Reviewing the specific items contributing to deferred tax assets and liabilities can provide insights into the company's future tax obligations and potential benefits.

It is important to note that these deferred tax items can significantly impact the overall financial health of Ben Jerrys. Franchisees should consider these factors when evaluating the financial stability and future prospects of the franchise.