What is the amount reported for deferred income taxes for Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
-----------|---------------------------------------------------------------------------------------|---------|------------|------|------------|-------|---------|--|--| | Net income (loss) $ (2,913) $ 1,477 $ (3,186) Adjustments to reconcile net loss to cash provided by (used in) operating activities: 489 1,691 3,506 Depreciation and amortization 489 1,691 3,506 Amortization of key money and contract costs 1,514 396 7 Amortization of contract liabilities 192 1,497 713 Deferred income taxes 1,112 (1,819) 654 Other income (expense), net 2 1 9 486 Other income (expense), net 3,111 (942) (50 Change in current assets and liabilities (3,111) (942) (50 Prepaid expenses and other current assets (706) (414) (541) Other long term assets (19,498) (9,440) (1,007) Account
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, deferred income taxes are detailed within the consolidated financial statements. In the reconciliation of net loss to cash provided by operating activities, deferred income taxes are listed as $1,112 for 2024, ($1,819) for 2023, and $654 for 2022.
These figures represent adjustments made to net income to reflect the actual cash impact of income taxes. Deferred income taxes arise from temporary differences between when income and expenses are recognized for financial reporting purposes versus when they are recognized for tax purposes. These differences can result in deferred tax assets or liabilities, which will eventually reverse in future years as the temporary differences are resolved.
For a prospective Sonesta Simply Suites franchisee, understanding these deferred tax adjustments is crucial for interpreting the company's cash flow from operations. A positive deferred tax figure, such as the $1,112 in 2024, indicates that the company's taxable income was lower than its reported income, potentially due to accelerated depreciation or other timing differences. Conversely, a negative figure, such as the ($1,819) in 2023, suggests that taxable income was higher than reported income. These deferred tax amounts can significantly impact the overall cash flow and financial health of Sonesta Simply Suites, and it's important to consider these figures when evaluating the franchise opportunity.
It is important to note that these figures are part of the consolidated financial statements, and may not directly reflect the financial performance of an individual franchised location. A potential franchisee should consult with a financial advisor to fully understand the implications of these figures and how they relate to their specific investment.