For The Standardx, what was the change in the deferred tax assets valuation allowance from 2021 to 2022?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
FYING ACCOUNTS**
For the Years Ended December 31, 2024, December 31, 2023, and December 31, 2022 (In millions of dollars)
| Description | Balance at beginning of period | Additions charged to revenues, costs, and expenses | Additions charged to other accounts | Deductions | Balance at end of period | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended December 31, 2024: | ||||||||||
| Deferred tax assets—valuation allowance | $ | 253 | $ | 17 | $ | (15) | $ | (165) A | $ | 90 |
| Year Ended December 31, 2023: | ||||||||||
| Deferred tax assets—valuation allowance | 262 | 28 | 13 | (50) | 253 | |||||
| Year Ended De |
Source: Item 10 — OTHER ASSETS (FDD pages 132–156)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the deferred tax assets valuation allowance decreased from $478 to $262 during the year ended December 31, 2022. This represents a reduction of $216 in the valuation allowance.
This change in valuation allowance could be due to several factors, such as changes in tax laws, improved financial performance, or a reassessment of the likelihood that The Standardx will be able to utilize its deferred tax assets in the future. A deferred tax asset is an asset on a company's balance sheet that may be used to reduce taxable income in the future. It's created when a company overpays taxes, whether through advance payments or because of tax breaks. A valuation allowance is a reduction to the deferred tax asset to reflect the possibility that it will not be realized.
The decrease in the deferred tax assets valuation allowance suggests that The Standardx believes it is more likely to realize the benefits of its deferred tax assets. According to note B, the amount primarily relates to the release of the valuation allowance recorded on U.S. federal and state deferred tax assets. This could be a positive sign for the company's financial health, as it indicates that The Standardx expects to generate sufficient taxable income in the future to utilize these assets.
For a prospective franchisee, this information is relevant because it provides insight into The Standardx's financial management and expectations for future profitability. While deferred tax assets and their valuation allowances are complex accounting concepts, understanding these figures can help franchisees assess the overall financial stability and outlook of the company.