According to Ledgers' 2025 Franchise Disclosure Document, the deferred tax asset in 2023 was $611,000. This figure represents the future tax benefits that Ledgers expects to realize from temporary differences between the financial statement and tax bases of its assets and liabilities. These temporary differences primarily relate to net operating losses.

Deferred tax assets arise because Ledgers has incurred losses that can be used to reduce future taxable income. The deferred tax asset is essentially a prepayment of future taxes. The FDD indicates that Ledgers' management believes that all deferred tax assets will be realized in future periods prior to their expiration, and therefore, the deferred tax assets have not been reduced by a valuation allowance.

It is important to note that the realization of these deferred tax assets depends on Ledgers' ability to generate sufficient future taxable income. If Ledgers' future financial performance does not meet expectations, it may not be able to utilize the deferred tax assets fully, which could negatively impact its financial position. Prospective franchisees should consider this when evaluating Ledgers' financial stability and future prospects.