What was the amount of unrecognized tax benefits for The Standardx as of December 31?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
have not previously been taxed in the U.S. are indefinitely reinvested.
At December 31, 2024, December 31, 2023, and December 31, 2022, total unrecognized tax benefits recorded in other long-term liabilities on our consolidated balance sheets were $366 million, $301 million, and $253 million, of which $137 million, $120 million, and $102 million, respectively, would impact the effective tax rate, if recognized. It is reasonably possible that a reduction of up to $5 million of unrecognized tax benefits could occur within 12 months resulting from the expiration of certain tax statutes of limitations. Further, while it is reasonably possible that the amount of uncertain tax benefits associated with the U.S. treatment of the loyalty program discussed below could significantly change within the next 12 months, at this time, we are not able to estimate the range by which the reasonably possible outcomes of the pending litigation could impact our uncertain tax benefits within the next 12 months.
A reconciliation of unrecognized tax benefits is as follows:
| Deferred tax assets—valuation allowance 262 28 | 13 | (50) 253 | |---|---|---| | Year Ended December 31, 2022: | | | | Deferred tax assets—valuation allowance 478 31 | | (250) B 262 | In 2024, the $65 million net increase in uncertain tax positions was primarily related to an accrual for the U.S. treatment of the loyalty program.
Source: Item 10 — OTHER ASSETS (FDD pages 132–156)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the unrecognized tax benefits were recorded in other long-term liabilities on the company's consolidated balance sheets. As of December 31, 2024, the total unrecognized tax benefits were $366 million. For the year prior, December 31, 2023, the amount was $301 million, and for December 31, 2022, the amount was $253 million.
The FDD also provides a reconciliation of unrecognized tax benefits. The unrecognized tax benefits at the beginning of the year, January 1, were $301 million in 2024, $253 million in 2023, and $205 million in 2022. The total increases related to current-period tax positions were $67 million in 2024, $54 million in 2023, and $38 million in 2022. Total increases or decreases related to prior-period tax positions were $11 million in 2024, ($3) million in 2023, and $22 million in 2022.
The lapse of the statute of limitations resulted in ($8) million in 2024, ($9) million in 2023, and ($5) million in 2022. Foreign currency translation adjustments accounted for ($5) million in 2024, $6 million in 2023, and ($7) million in 2022. These changes resulted in the unrecognized tax benefits at the end of the year, December 31, of $366 million in 2024, $301 million in 2023, and $253 million in 2022.
It is important to note that these figures represent The Standardx's unrecognized tax benefits at a consolidated level, and may not directly reflect the tax situation of an individual franchisee. However, understanding the company's overall tax position can provide insight into its financial management and potential risks.