What was the gross deferred tax assets for Chem Dry in 2023?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
to income before taxes is as follows:
| 2022 | |||||
|---|---|---|---|---|---|
| 2023 | (As Restated) | 2021 | |||
| Income tax (recovery) expense, computed at 21 | |||||
| percent of pretax income | $ | (9,416) $ | (830) $ | 873 | |
| Permanent differences | 9,568 | - | - | ||
| State income tax expense (recovery) | 168 | (42) | 257 | ||
| Other | 157 | (997) | 89 | ||
| Total provision for income taxes | $ | 477 | $ (1,869) $ | 1,219 |
The details of the net deferred tax liability are as follows:
| 2023 | (As Restated) | 2021 | |
|---|---|---|---|
| Deferred tax assets: | |||
| Allowance for credit losses | $ 531 | $ 941 | $ 1,312 |
| Deferred revenue | 1,259 | 1,759 | 2,365 |
| Notes receivable |
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the company's gross deferred tax assets totaled $4,761 in 2023. The FDD also provides figures for previous years, showing $5,240 (as restated) in 2022 and $5,645 in 2021. These assets are further broken down into categories such as allowance for credit losses, deferred revenue, notes receivable, interest limitation carryforward, accrued liabilities, lease liability, and other assets.
Deferred tax assets arise from temporary differences between the book value of an asset or liability and its tax basis. These differences result in future deductible amounts for tax purposes. For Chem Dry, the largest components of deferred tax assets include items like deferred revenue and interest limitation carryforward, indicating revenues recognized for accounting purposes that are not yet taxed and interest expenses that are not currently deductible.
Prospective franchisees should understand that these figures reflect Chem Dry's overall financial position and tax strategy. While franchisees are not directly involved in managing these specific assets, understanding the franchisor's financial health is crucial. A strong asset base can indicate financial stability and the ability to support the franchise system. It is important to note that these are consolidated figures for BFG Holdco, Inc., which includes Chem-Dry, N-Hance, and Delta Disaster Services.
It is also important to consider the deferred tax liabilities, which totaled $(8,027) in 2023, $(8,241) in 2022, and $(11,241) in 2021. These liabilities primarily stem from intangibles, property and equipment, prepaid expenses, and right-of-use assets. The net deferred tax liability for Chem Dry was $(3,266) in 2023, $(3,001) in 2022, and $(5,596) in 2021. Reviewing these figures in totality provides a more comprehensive view of the company's tax position.