What was the balance of the tax valuation allowance for Budget at the beginning of the period in 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
|---|---|---|---|---|---|---|---|---|
| Tax Valuation Allowance: Year Ended December 31, 2024 2023 2022 | $ | 106 103 169 | $ | (6) (2) (63) | (15) 5 (3) | $ | - | $ 85 106 103 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the balance of the tax valuation allowance at the beginning of the period in 2022 was $169 million. This figure represents Budget's assessment of deferred tax assets that may not be realized in the future. A valuation allowance is a contra-asset account used to reduce the carrying value of deferred tax assets.
The tax valuation allowance is an accounting estimate that can be subject to change based on various factors, including changes in tax laws, business performance, and future profitability projections. For Budget franchisees, understanding these figures in the FDD can provide insight into the company's financial health and its approach to managing tax-related uncertainties.
It is important to note that the tax valuation allowance is a complex accounting concept, and prospective Budget franchisees should consult with their own financial advisors to fully understand its implications. Reviewing the changes in the allowance over the three-year period (2022-2024) can also provide a sense of how Budget's financial outlook has evolved.