What is the net deferred tax asset for Carbones Pizzeria?

According to the 2025 FDD, Carbones Pizzeria's net deferred tax asset as of October 31, 2022, was $44,000. This is calculated by considering deferred tax assets such as the allowance for doubtful accounts ($54,000) and changes in accruals ($9,000), which total $63,000. The deferred tax liability, primarily from property and equipment, is ($19,000). The net deferred tax asset is the difference between these two figures.

Deferred tax assets and liabilities arise from temporary differences in how income and expenses are recognized for financial statement and income tax reporting purposes. These differences primarily stem from items like allowances for doubtful receivables, accrued liabilities, depreciation, and net operating loss carryforwards. The company records the tax effects of these differences as deferred income taxes.

For a prospective Carbones Pizzeria franchisee, understanding these figures is crucial for assessing the financial health and tax planning strategies of the company. A net deferred tax asset suggests that the company has future tax benefits available, which could positively impact its financial performance. However, it's important to note that the value of these assets depends on the company's ability to generate future taxable income to utilize them.

It is also important to note that the financial statements as of February 28, 2025, included in the FDD are unaudited. Prospective franchisees should be aware that these figures have not been reviewed or audited by a certified public accountant.