What were the deferred tax assets for Engel & Volkers as of December 31, 2023?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Current income taxes (benefit): Federal State and local Foreign | $ (277,603) $ 41,725 217,979 | 392,650 $ 152,097 284,198 | 596,772 280,631 298,070 |
| (17,899) | 828,945 | 1,175,473 | |
| Deferred income tax provision | |||
| (benefit): | |||
| Federal | 131,920 | (50,923) | 448,717 |
| State and local | (127,174) | (2,977) | (317,450) |
| 4,746 | (53,900) | 131,267 | |
| Total provision for (bene |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the company's deferred tax assets as of December 31, 2023, totaled $4,046,040. However, a valuation allowance of $2,968,716 was applied, resulting in deferred income taxes of $1,077,324.
Deferred tax assets typically arise from temporary differences between the book value of assets and liabilities and their tax bases. These assets can be used to reduce future taxable income, effectively lowering the amount of taxes Engel & Volkers will pay in the future. However, the valuation allowance indicates that Engel & Volkers determined it was more likely than not that a portion of these deferred tax assets would not be realized.
For a prospective Engel & Volkers franchisee, understanding these figures is crucial because they reflect the financial health and tax strategies of the company. While deferred tax assets can be beneficial, a significant valuation allowance might suggest uncertainty about future profitability or the ability to utilize these assets fully. It is important to note that these figures pertain to the overall financial standing of Engel & Volkers and not the individual franchise unit.