What was the net deferred tax liabilities for My Salon Suite as of December 31, 2024?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
assets and liabilities consist of the following as of December 31:
| 2024 | 2023 | |
|---|---|---|
| Deferred tax assets | ||
| Allowance for credit losses | $ 213,104 | $ 259,270 |
| Accrued compensation | 216,180 | 105,770 |
| Share-based compensation | 585,048 | 653,599 |
| Accrued professional fees | 51,940 | 34,418 |
| Deferred revenue | 1,613,108 | 860,544 |
| ASC 842 lease liability | 140,303 | 3,309 |
| ASC 606 adjustments | (224,956) | (224,956 ) |
| Total deferred tax assets | 2,594,727 | 1,691,954 |
| Deferred tax liabilities: | ||
| Intangible assets | (18,813,230) | (18,689,307 ) |
| Prepaid expenses | (4,117) | 9,702 |
| ASC 842 Right of Use Asset | (142,804) | (4,487 ) |
| Depreciation | (31,197) | (90,514 ) |
| Tax amortization of Sec.174 | (7,430) | (137,714 ) |
| Total deferred tax liabilities | (18,998,778) | (18,912,320 ) |
Source: Item 6 — Other Intangibles and Goodwill (FDD pages 274–314)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, the net deferred tax liabilities as of December 31, 2024, were approximately $16,404,051. This figure represents the difference between the company's total deferred tax assets and total deferred tax liabilities at that specific point in time. Deferred tax liabilities generally arise from temporary differences between the book (financial reporting) and tax values of assets and liabilities.
The deferred tax liabilities are further broken down into specific categories. For instance, intangible assets accounted for $18,813,230 of the liabilities, while ASC 842 Right of Use Asset contributed $142,804. Depreciation accounted for $31,197 and tax amortization of Sec.174 was $7,430. Prepaid expenses, however, showed a different trend, contributing a relatively small amount of $4,117.
Prospective franchisees should understand that deferred tax liabilities are a normal part of business accounting. Monitoring these liabilities and understanding the factors that influence them can provide insights into My Salon Suite's financial planning and tax strategies. It's also worth noting the changes from the previous year (2023), where the net deferred tax liabilities were $17,220,366, indicating a decrease in net deferred tax liabilities from 2023 to 2024.