What were the other adjustments for the Tax Valuation Allowance for Budget for the year ended December 31, 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ed average interest rate of 8.01%. These notes were issued under previously outstanding series of debt.
In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities.
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Schedule II – Valuation and Qualifying Accounts
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
|---|---|---|---|---|---|---|---|---|
| Allowance for Doubtful Accounts: Year Ended December 31, 2024 2023 2022 | 87 | $ | 87 | $ (3) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the tax valuation allowance adjustments are detailed in the financial statements. For the year ended December 31, 2022, the "Other Adjustments" to the tax valuation allowance was a reduction of $3 million. The footnote to the table indicates that these adjustments primarily reflect currency translation adjustments.
In simpler terms, this means that Budget adjusted its tax valuation allowance by decreasing it by $3 million in 2022 due to factors related to currency fluctuations. A tax valuation allowance is a reduction in the value of deferred tax assets, which are assets that can be used to reduce future tax liabilities. These adjustments are important for understanding Budget's overall tax position and financial health.
For a prospective Budget franchisee, this information provides insight into how Budget manages its deferred tax assets and how currency fluctuations can impact its financial statements. While a $3 million adjustment may seem small in the context of Budget's overall financials, it demonstrates the company's attention to detail in accounting for various financial factors. Franchisees may want to inquire further about Budget's strategies for managing currency risk and its potential impact on the company's profitability.