What was the expense (benefit) from income taxes for Ledgers in 2022?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 5 - CURRENT EXPECTED CREDIT LOSSES
Changes in the allowance for credit losses during the year are as follows:
| Balance, January 1, 2023 | $ | - |
|---|---|---|
| Adoption of Topic 326 | 42 | 2,286 |
| Allowance for credit losses | (26 | 5,439) |
| Balance, December 31, 2023 | 15 | ,847 |
| Write-offs | (15 | 5, |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the expense (benefit) from income taxes in 2022 was a benefit of $153,000. This figure reflects the reduction in income taxes due to various deductions, credits, or other tax advantages that Ledgers was able to utilize during that year.
This benefit from income taxes is also reflected in the cash flows from operating activities. The FDD states the benefit from income taxes was ($153,000) in 2022. This adjustment reconciles the net loss to net cash used in operating activities, indicating that the tax benefit reduced the cash outflow from operations.
Prospective franchisees should understand that tax benefits can significantly impact the overall financial performance of Ledgers. These benefits can arise from various sources, such as deferred tax assets related to net operating losses. Ledgers' management believes that these deferred tax assets will be realized in future periods, further enhancing the company's financial position. Franchisees should consult with financial advisors to understand the implications of these tax benefits and how they might affect their investment.