What was the net change in valuation allowance for Corcoran in 2023?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Federal statutory rate | 21 % | 21 % | 21 % |
| State and local income taxes, net of federal tax benefits | 5 | 1 | 3 |
| Non-deductible equity compensation | (1) | (1) | — |
| Non-deductible executive compensation | (4) | (4) | (1) |
| Goodwill impairment | — | (5) | (8) |
| Uncertain tax positions | — | — | (1) |
| Tax credits (a) | 5 | 6 | 7 |
| Net change in valuation allowance (b) | (21) | (5) | — |
| Other permanent differences | (3) | — | (2) |
| Effective tax rate | 2 % | 13 % | 19 % |
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, the net change in valuation allowance for the year 2023 was ($5). This figure is part of a table presenting financial data related to receipts, offering a glimpse into the company's tax-related adjustments over three years. The table includes data for 2022, 2023, and 2024.
In practical terms, the valuation allowance is a contra-asset account used to reduce the carrying value of deferred tax assets. A change of ($5) in 2023 suggests that Corcoran decreased its valuation allowance during that year. This could be due to an improved outlook on the company's ability to utilize its deferred tax assets in the future, meaning they expect to be able to use those assets to offset future tax liabilities.
For a prospective franchisee, this information provides insight into Corcoran's financial management and tax strategy. While a single year's change in valuation allowance doesn't tell the whole story, it contributes to a broader understanding of the company's financial health and its approach to tax planning. It's advisable for potential franchisees to consider this data in conjunction with other financial metrics and to seek professional advice when evaluating the financial stability of a franchise opportunity.