What is the effect on deferred tax assets and liabilities of a change in the tax rates for Carbones Pizzeria?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the company addresses how changes in tax rates affect deferred tax assets and liabilities. The document states that deferred tax assets and liabilities are calculated using the tax rates that are expected to be in effect when the temporary differences are recovered or settled.

Specifically, Carbones Pizzeria recognizes the impact of a change in tax rates on deferred tax assets and liabilities within the income for the period that includes the date the change was enacted. This means that if tax rates increase or decrease, the value of the company's deferred tax assets and liabilities will be adjusted to reflect the new rates, and the resulting gain or loss will be reported in the company's income statement for that period.

For a prospective Carbones Pizzeria franchisee, this accounting practice means that the financial statements they review will reflect the most up-to-date tax implications. It also highlights the importance of understanding potential future tax rate changes, as these could impact the value of deferred tax items and, consequently, the overall financial performance of Carbones Pizzeria.