What was the deferred income taxes amount for My Salon Suite in 2022?

According to My Salon Suite's 2025 Franchise Disclosure Document, the company's accounting of deferred income taxes involves recognizing the future tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities. These are measured using enacted tax rates and laws expected to be in effect when the differences reverse. The company also uses a two-step process for uncertain tax positions, determining if a tax position is more likely than not to be sustained upon examination. If it meets this threshold, the expense is measured as the largest amount with a greater than 50 percent likelihood of being realized upon settlement.

The FDD provides a breakdown of deferred tax assets and liabilities as of December 31, 2023, and December 31, 2022. The total deferred tax assets for 2022 amounted to $2,630,969. Deferred tax liabilities totaled $(19,668,928). The net deferred tax assets (liabilities) for 2022 were $(17,037,959).

In practical terms, this means that My Salon Suite had a net deferred tax liability, indicating that the company expected to pay more in taxes in the future than it had already expensed for financial reporting purposes. For a franchisee, understanding these figures is crucial for assessing the financial health and tax planning strategies of the franchisor, as deferred tax liabilities can impact future profitability and cash flow.