What is the total deferred tax asset reported for Carbones Pizzeria?

According to the 2025 FDD, Carbones Pizzeria's consolidated financial statements as of October 31, 2022, show a total deferred tax asset of $63,000. This figure is derived from an allowance for doubtful accounts of $54,000 and a change in accruals of $9,000. The deferred tax liability, primarily related to property and equipment, is reported as ($19,000). The net deferred tax asset is $44,000.

Deferred tax assets and liabilities arise from temporary differences in the recognition of income and expenses for financial statement and income tax reporting purposes. These differences primarily relate to 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 deferred tax assets and liabilities is crucial for assessing the company's financial health. Deferred tax assets can be used to reduce future taxable income, while deferred tax liabilities represent future tax obligations. The net deferred tax asset indicates the overall tax benefit that the company expects to realize in the future based on current temporary differences. However, it is important to note that the financial statements as of and for the 4-month period February 28, 2025 are prepared without an audit.