According to Ledgers' 2025 Franchise Disclosure Document, the deferred tax asset for 2024 was $715,000. This figure represents the net deferred tax asset, which is the result of combining the gross deferred tax assets from both federal and state sources. Specifically, the gross deferred tax assets from federal sources amounted to $588,000, while those from state sources totaled $127,000.

Deferred tax assets typically arise from temporary differences between the book value of assets and liabilities reported on a company's financial statements and their respective tax bases. These differences often relate to items such as net operating loss carryforwards, which can be used to reduce future taxable income.

For a prospective Ledgers franchisee, understanding the deferred tax asset is crucial because it reflects the company's ability to potentially reduce its future tax obligations. The FDD notes that Ledgers' deferred tax asset relates to net operating loss carryforwards, which approximated $2,900,000 as of December 31, 2024. The company's management believes that these deferred tax assets will be fully realized in future periods before they expire, and as such, no valuation allowance has been applied to reduce their value.

It's important to note that the realization of deferred tax assets depends on Ledgers' future profitability and its ability to generate sufficient taxable income to utilize the net operating loss carryforwards. While management is optimistic about realizing these assets, changes in tax laws or the company's financial performance could impact their actual value. Therefore, prospective franchisees should consider these factors when evaluating Ledgers' financial health and future prospects.