What evidence does Bw Premier Collection consider when determining the necessity of a valuation allowance?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company assesses whether a valuation allowance should be established based on its determination of whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Both positive and negative evidence is considered when determining the necessity of the valuation allowance as well as the sources of taxable income supporting the realization of the deferred tax assets, including taxable income in carryback years, future reversals of existing taxable temporary differences, tax-planning strategies and projected taxable income from future operations.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the company assesses the need for a valuation allowance by determining if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this determination, Bw Premier Collection considers both positive and negative evidence.
Specifically, Bw Premier Collection looks at the sources of taxable income that could support the realization of deferred tax assets. These sources include taxable income in carryback years, which refers to income from previous years that can offset current losses. They also consider future reversals of existing taxable temporary differences, which are differences between the financial statement and tax bases of assets and liabilities that will eventually reverse over time.
Additionally, Bw Premier Collection takes into account tax-planning strategies that could potentially increase taxable income and projected taxable income from future operations. By evaluating all these factors, Bw Premier Collection aims to make an informed decision about whether a valuation allowance is necessary to accurately reflect the realizable value of its deferred tax assets.