What was the gross deferred tax liabilities for Chem Dry in 2022?
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 gross deferred tax liabilities for 2022 were ($8,241). This figure, presented in thousands of dollars, reflects the total deferred tax obligations Chem Dry had accumulated.
Deferred tax liabilities arise from temporary differences between the book value of an asset or liability and its tax basis. These liabilities represent the future tax obligations that Chem Dry will have to pay when these temporary differences reverse. Common sources of deferred tax liabilities include accelerated depreciation methods used for tax purposes, which create a timing difference between when depreciation is recognized for financial reporting versus tax reporting.
For a prospective Chem Dry franchisee, understanding these figures provides insight into the financial health and tax planning strategies of the company. While franchisees are not directly responsible for these corporate-level liabilities, they reflect the overall financial management and potential tax implications that could indirectly affect the franchise system. Reviewing these figures over several years, as presented in the table, can reveal trends and provide a more comprehensive understanding of Chem Dry's financial position.