According to Ledgers' 2025 Franchise Disclosure Document, the deferred tax asset in 2022 was $513,000. This figure is part of the non-current assets listed in the balance sheets. Deferred tax assets arise from temporary differences between the financial statement and tax bases of assets and liabilities.

For a prospective franchisee, understanding deferred tax assets is crucial because it reflects the potential future tax benefits available to the company. These assets can impact the overall financial health and profitability of Ledgers, which indirectly affects the franchisee's investment.

The FDD also states that the deferred tax asset relates to net operating loss carryforwards. As of December 31, 2024, these net operating losses approximated $2,900,000. Ledgers' management believes that all deferred tax assets will be realized in future periods before they expire, and therefore, the deferred tax assets have not been reduced by a valuation allowance.

It is important to note that the determination of current and deferred income taxes involves complex analyses and interpretations of tax laws. These interpretations could be challenged by tax authorities, potentially leading to results that differ significantly from initial estimates. Prospective franchisees should consider these factors and consult with a financial advisor to fully understand the implications of deferred tax assets on Ledgers' financial stability and their investment.