What was the federal deferred tax benefit for Ledgers in 2024?
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 |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the federal deferred tax benefit for 2024 was $(86,000). This indicates a tax benefit resulting from temporary differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets are expected to be realized in future periods.
Deferred tax assets arise from net operating loss carryforwards, which approximated $2,900,000 as of December 31, 2024. Management believes that all deferred tax assets will be realized in future periods prior to their expiration, and therefore, no valuation allowance has been applied.
It's important to note that the determination of current and deferred income taxes is based on complex analyses and interpretations of federal and state income tax laws. These estimates and interpretations could be challenged by taxing authorities, potentially leading to results that differ significantly from the initial estimates.