According to Ledgers' 2025 Franchise Disclosure Document, the deferred tax asset in 2023 was $611,000. A deferred tax asset is a balance sheet item that can arise when a company has overpaid taxes or has tax deductions or credits available that can be used to reduce future tax obligations. For Ledgers, this deferred tax asset primarily relates to net operating loss carryforwards.

In simpler terms, Ledgers had incurred losses in previous years that could be used to lower their tax bill in future, more profitable years. The deferred tax asset represents the potential future tax benefit of these past losses. The FDD notes that as of December 31, 2024, Ledgers' net operating losses approximated $2,900,000.

The document also states that Ledgers' management believes that the deferred tax assets will be fully realized in future periods, meaning they expect the company to generate enough taxable income to utilize these loss carryforwards. This is a positive sign for the financial health and future prospects of Ledgers, as it indicates that the company anticipates being profitable enough to take advantage of these tax benefits.