When are deferred tax assets and liabilities offset at Petro Stopping Center?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Deferred tax assets and liabilities are offset only when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the current tax assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.
Source: Item 23 — RECEIPTS **RECEIPTS (FDD pages 87–131)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, deferred tax assets and liabilities are offset only under specific conditions. These conditions require that Petro Stopping Center has a legally enforceable right to use its tax assets to reduce its tax liabilities.
Additionally, the deferred tax assets and liabilities must relate to income taxes levied by the same taxation authority. This applies whether the taxes are on the same taxable entity or on different taxable entities. However, in the case of different taxable entities, there must be a clear intention to settle the current tax assets and liabilities on a net basis. Alternatively, the assets and liabilities can be offset if there is an intention to realize the assets and settle the liabilities simultaneously.
In simpler terms, Petro Stopping Center can only offset deferred tax assets and liabilities when it has a legal right to do so, and when the assets and liabilities are taxed by the same authority. The company must also plan to either settle these amounts as a net sum or realize the assets and settle the liabilities at the same time.