Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 123

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 123
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 of tax matters may differ from our estimates and assumptions. Unfavorable settlement of any particular issue would require the use of cash and could result in increased income tax expense. Favorable resolution would result in reduced income tax expense.

68

DELUXE CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)

Tax-effected temporary differences that gave rise to deferred tax assets and liabilities as of December 31 were as follows:20242023(in thousands)Deferred tax assetsDeferred tax liabilitiesDeferred tax assetsDeferred tax liabilitiesGoodwill$— $46,947 $— $40,572 Employee benefit plans— 20,533 — 14,482 Prepaid assets— 6,738 — 5,385 Cloud computing arrangements— 6,480 — 10,337 Revenue recognition— 6,356 — 7,187 Property, plant and equipment— 5,067 — 4,529 Acquisition costs— 1,602 — 1,604 Operating leases16,844 13,203 20,078 15,923 Deductible interest carryforward50,989 — 34,038 — Net operating loss, tax credit, and capital loss carryforwards24,255 — 22,639 — Intangible assets22,585 — 4,510 — Reserves and accruals7,272 — 9,522 — Inventories3,726 — 2,804 — Deferred revenue1,503 — 1,406 — Gain on exit from payroll and human resources services business (Note 6)— — 6,100 — All other1,385 588 670 719 Total deferred taxes128,559 107,514 101,767 100,738 Valuation allowances(16,180)— (14,984)— Net deferred taxes$112,379 $107,514 $86,783 $100,738 The valuation allowances as of December 31, 2024 and December 31, 2023 related primarily to capital loss carryforwards in the U.S and net operating loss carryforwards in various state jurisdictions that we do not currently expect to fully realize. Changes in our valuation allowances for the years ended December 31 were as follows:(in thousands)202