What was the reported amount for deferred tax assets for Engel & Volkers in 2023?

According to Engel & Volkers's 2025 Franchise Disclosure Document, the company's deferred tax assets in 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 are expected to reduce taxable income in future years. However, the application of a valuation allowance suggests that Engel & Volkers determined it was not more likely than not that some portion of these deferred tax assets would be realized.

For a prospective Engel & Volkers franchisee, this information provides insight into the company's tax position and its assessment of future profitability. The existence of deferred tax assets can be a positive sign, indicating potential future tax benefits. However, the valuation allowance indicates uncertainty regarding the realization of these benefits. Franchisees may want to inquire about the factors contributing to the deferred tax assets and the rationale behind the valuation allowance to better understand the company's financial outlook.