What was the change in accruals related to deferred tax assets for Carbones Pizzeria?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
The tax effects of temporary differences between financial statements and tax reporting give rise to deferred tax assets and deferred tax liabilities are presented below:
| Allowance for doubtful accounts | $ 54,000 |
|---|---|
| Change in accruals | 9,000 |
| Total deferred tax assets | 63,000 |
| Deferred tax liability: | |
| Property and equipment | (19,000) |
| Total deferred tax liability | (19,000) |
| Net deferred tax asset | $ 44,000 |
M & T PIZZA INCORPORATED AND SUBSIDIARIES Notes to Consolidated Financial Statements
For the Year Ended October 31, 2024
5. Income Taxes (Continued)
The Company's provision for income taxes differs from applying the statutory U.S.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to the 2025 FDD, Carbones Pizzeria's change in accruals related to deferred tax assets can be seen by comparing the financial statements from 2023 and 2024. In 2023, the change in accruals was $9,000, while in 2024, this figure decreased to $5,000. This indicates a $4,000 decrease in the change in accruals related to deferred tax assets from 2023 to 2024.
Deferred tax assets arise from temporary differences between financial reporting and tax reporting, and accruals play a role in these differences. The change in accruals impacts the total deferred tax assets. In 2023, total deferred tax assets amounted to $63,000, while in 2024, they were $39,000. This shows a decrease in total deferred tax assets, which is influenced by the change in accruals.
Prospective franchisees should understand that these figures reflect the company's accounting practices and tax positions. Fluctuations in accruals and deferred tax assets can affect the company's overall financial health and tax liabilities. It's important to consult with a financial advisor to fully understand the implications of these changes and how they might impact the franchise's financial performance.