Where are the deferred tax assets and liabilities disclosed for Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements' carrying amounts of existing assets and liabilities, and their respective tax base. Deferred tax assets and liabilities, as disclosed in Note 6, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date. Deferred income tax expense represents the changes during the year in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
The Company evaluated its tax positions and determined it has no uncertain tax positions as of December 31, 2023 and 2022.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, information regarding deferred tax assets and liabilities can be found in Note 6 of the financial statements. The note explains that deferred tax assets and liabilities are recognized for the future tax consequences that arise from differences between the carrying amounts of existing assets and liabilities in the financial statements and their respective tax bases. These assets and liabilities are measured using the enacted tax rates expected to be in effect when the temporary differences are recovered or settled.
The note further clarifies that deferred income tax expense reflects the changes in deferred tax assets and liabilities throughout the year. However, deferred tax assets are reduced by a valuation allowance if it is deemed more likely than not that some or all of the assets will not be realized.
Additionally, Golden Krust Caribbean Restaurant has evaluated its tax positions and determined that there were no uncertain tax positions as of December 31, 2023 and 2022.