Reviewing the deferred tax rollforward

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Published: January 07, 2024 09:11

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Tax Provision calculates a detailed deferred tax amount and deferred tax provision. Deferred taxes and provisions are calculated by legal entity and temporary difference. Tax Provision is set up to maintain and automate, where possible, the rollforward of each legal entity’s detailed gross temporary differences by disclosure category. Beginning of year gross temporary differences are rolled over from the prior year end. These values are then adjusted for current year adjustments, return to provision, and various other automated and manual adjustments. Tax Provision calculates the cumulative translation amount by temporary difference for legal entities that use a different functional currency than the currency used for consolidated reporting.

Understanding Elements for deferred tax rollforward

The Grs elements for deferred tax rollforward represent the after-tax value of the related Net elements.

Deferred Tax Rollforward elements

NetNBOY_ASC—BOY Deferred Tax Asset/(Liability)
This column reflects the beginning of year deferred tax asset / liability. This balance is equal to the amount in the beginning of year gross temporary difference column multiplied by the applicable beginning of year deferred tax rate.
NetNBRBOY_ASC—NBR BOY Deferred Tax Asset/(Liability)
This column impacts the adjusted National level beginning of year deferred tax balance. It is calculated by multiplying -1 by the beginning of year Regional deferred balance by the beginning of year national deferred tax rate.
NetNPY_ASC—Prior Year Adjustment (Restatement)
This column reflects the tax impact of the gross prior year adjustment. This balance equals the amount in the gross temporary difference prior year adjustment (restated) column multiplied by the applicable beginning of year deferred tax rate.
NetNBRPY_ASC—NBR Prior Year Adjustment
This column impacts the adjusted National level prior year adjustment deferred tax balance. It is calculated by multiplying -1 by the beginning of year Regional deferred balance by the beginning of year national deferred tax rate.
NetNBOYA_ASC—BOY Deferred Tax Asset/(Liability) - As Adjusted
This is a subtotal of the beginning of year balances plus the prior year adjustments.
NetNCY_ASC—Current Year
This column represents the tax impact of the current year temporary differences that are used in the calculation of the current provision. This balance equals the amount in the gross temporary difference column multiplied by the current year tax rate. Since the tax impact of these adjustments is reflected in the current provision, this is not reflected in the effective tax rate.
NetNPYAdjDfd_ASC—Prior Year Adjustments - Deferred Only Impact
This column represents the tax impact of the activity posted in the prior year adjustments column of the gross temporary difference rollforward. This balance is equal to the amount in the gross temporary difference column multiplied by the current year tax rate. This is treated as a deferred provision only adjustment, which means that this adjustment is part of the deferred provision and is also reflected as an adjustment on the effective tax rate report.
NetNRTPDfd_ASC—RTP - Deferred Only Impact
This column represents the tax impact of the activity posted into the return to provision column of the gross temporary difference rollforward. This balance is equal to the amount in the gross temporary difference column multiplied by the current year tax rate. This is treated as a deferred provision only adjustment, which means that this adjustment is part of the deferred provision and is also reflected as an adjustment on the effective tax rate report.
NetNRARDfd_ASC—RAR - Deferred Only Impact
This column represents the tax impact of the activity posted into the Revenue Agent’s Report (RAR) column of the gross temporary difference rollforward. This balance is equal to the amount in the gross temporary difference column multiplied by the current year tax rate. This is treated as a deferred provision only adjustment, which means that this adjustment is part of the deferred provision and is also reflected as an adjustment on the effective tax rate report.
NetNCurDfd_ASC—Other Adjustments Current and Deferred
This column represents the tax impact of the activity posted into the Other Adjustments - Current and Deferred column of the gross temporary difference rollforward. This balance is equal to the amount in the gross temporary difference column multiplied by the current year tax rate. This adjustment impacts the deferred provision and the current provision in an equal and opposite amount in an additional provision item.
NetNDfd_ASC—Other Adjustments - Deferred Only
This column represents the tax impact of the activity posted into the Other Adjustments - Deferred Only column of the gross temporary difference rollforward. This balance is equal to the amount in the gross temporary difference column multiplied by the current year tax rate. This is treated as a deferred provision only adjustment, which means that this adjustment is part of the deferred provision and is also reflected as an adjustment on the effective tax rate report.
NatNTrfrCurDfd_ASC—Transfers - Current and Deferred Impact
This column represents the tax impact of the activity posted into the Transfers - Current and Deferred column of the gross temporary difference rollforward. This balance is equal to the amount in the gross temporary difference column multiplied by the current year tax rate. This adjustment impacts the deferred provision and the current provision in an equal and opposite amount in an additional provision item.
NetNTrfrDfd_ASC—Transfers - Deferred Only Impact
This column represents the tax impact of the activity posted into the Transfers - Deferred Only column of the gross temporary difference rollforward. This balance is equal to the amount in the gross temporary difference column multiplied by the current year tax rate. This is treated as a deferred provision only adjustment, which means that this adjustment is part of the deferred provision and is also reflected as an adjustment on the effective tax rate report.
NetNUDiff_ASC—Unexplained - Impact Provision
This column impacts the total National level deferred tax balance. It is calculated by multiplying the gross unexplained - impact provision amount by the national current year tax rate.

NetNRCBOY_ASC—Deferred Tax Impact - Change in Tax Rates BOY
This column represents the impact of the beginning balance on the changes in the deferred tax rates from the end of the period to the beginning of the period. The beginning of year deferred tax rate is applied to the beginning of year balance.

NetNRCCY_ASC—Deferred Tax Impact - Change in Tax Rates CY
This column represents the impact of the current year activity by the difference between the current year tax rate and end of year deferred rate.

NetNRCAcqP_ASC—Deferred Tax Impact - Change in Tax Rates ACQ PRIOR
This element is protected from input as the amount in NetNRCAcqC_ASC—Deferred Tax Impact – Change in Tax Rates ACQ CUR is copied to this element and added to any amount already in this element from the previous month.

NetNRCAcqC_ASC—Deferred Tax Impact - Change in Tax Rates ACQ CUR
This element is protected from input as the amount input to the Acquisitions input app (RA0303) in NetNRCAcqC_ASC flows to the regional deferred tax rollforward.

NetNRCAcqT_ASC—Deferred Tax Impact - Change in Tax Rates TOT ACQ
This is the sum of NetRRCAcqP_ASC and NetNRCAcqC_ASC and represents adjustments to the regional deferred tax expense in the prior and current period as a result of acquisitions.

NetNRC_ASC—Deferred Tax Impact - Change in Tax Rates
This column is the total change in deferred tax change in tax rates.

NetNBRDP_ASC—NBR Deferred Provision
This column impacts the adjusted National level total deferred provision. This column is calculated by multiplying -1 by the Regional total deferred provision by the national current year tax rate.

NetNTDP_ASC—Total Deferred Provision
This column is the sum of all previous columns, which calculates the deferred provision. All remaining columns do not impact the deferred provision but do impact the deferred tax end of year balance.

NetNAcqPR_ASC—Acquisitions Prior
This column impacts the end of year deferred tax balance. It is calculated by multiplying the gross temporary difference symbol by the beginning of year national deferred tax rate.

NetNAcqCur_ASC—Acquisitions Net
This column impacts the end of year deferred tax balance. It is calculated by multiplying the gross temporary difference symbol by the current year national deferred tax rate.

NetNAcq_ASC—Acquisitions
This column is the sum of NetNAcqPR_ASC—Acquisitions Prior and NetNAcqCur_ASC—Acquisitions Net.

NetNRCAcqPR_ASC—Deferred Tax Impact - Change in Tax Rates ACQ PRIOR Reversal
This element is protected from input as the amount in NetNRCAcqP_ASC—Deferred Tax Impact - Change in Tax Rates ACQ PRIOR is copied to this element and multiplied by -1.

NetNRCAcqCR_ASC—Deferred Tax Impact - Change in Tax Rates ACQ CUR Reversal
This element is protected from input as the amount in NetNRCAcqC_ASC—Deferred Tax Impact - Change in Tax Rates ACQ CUR is copied to this element and multiplied by -1.
NetNRCAcqTR_ASC—Deferred Tax Impact - Change in Tax Rates TOT ACQ Reversal
This is the sum of NetNRCAcqPR_ASC and NetNRCAcqCR_ASC and represents the total reversal of the adjustment to the deferred tax expense in the prior and current period as a result of acquisitions.

NetNDisp_ASC—Disposals
This column impacts the end of year deferred tax balance. It is calculated by multiplying the Disposals column in the gross temporary difference by the current year national deferred tax rate.

NetNNPOCI_ASC—Non-Provision - Other Comprehensive Income
This column impacts the end of year deferred tax balance. It is calculated by multiplying the non-provision OCI column in the gross temporary difference by the current year national deferred tax rate.

NetNRTPNPOCIDfd_ASC—RTP - OCI
This column represents the after-tax current year true-up for those accounts identified as OCI from the Return to Provision input app (NA0101).

NetNNPOCIOth_ASC—Non-Provision - Other OCI
Use this column to track after-tax other OCI temporary difference movements. The taximpact of this adjustment is treated as a deferred-only adjustment.

NetNBRNPOCI_ASC—NBR - Non-Provision - OCI
This column is the national benefit of region for the OCI activity. It is calculated bymultiplying the Regional OCI activity multiplied by -1 by the current year national taxrate.

NetNNPOCIRCBOY_ASC—Non-Provision OCI - Change in Tax Rates BOY
This column is calculated by the system and is equal to the beginning of year gross temporary difference balance multiplied by the difference between the ending and beginning deferred tax rates for accounts classified as OCI.

NetNNP123_ASC—Non-Provision - Stock Based Compensation
This column impacts the end of year deferred tax balance. It is calculated by multiplying the non-provision Stock Based Compensation column in the gross temporary difference by the current year national deferred tax rate.

NetNNPOth_ASC—Non-Provision - Other
This column impacts the end of year deferred tax balance. It is calculated by multiplying the non-provision Other column in the gross temporary difference by the current year national deferred tax rate.

NetNBRNP_ASC—NBR Non-Provision
This column impacts the total National level deferred tax balance. It is calculated by multiplying -1 by the Regional non-provision amount by the national current year tax rate.

NetNNPT_ASC—Total Non-Provision
Total Non-Provision Items.

NetNCTABOY_ASC—CTA - BOY
This column appears when viewing a translated currency for the entity. It is calculated on the difference between the beginning of year deferred tax asset / (liability) translated at the beginning of year spot rate and the end of year average rate.

NetNCTACYR_ASC—CTA - CYr
This column appears when viewing a translated currency for the entity. It is calculated on the difference between the end of year deferred tax asset / (liability) is translated at the end of year spot rate, the current year activity related to the deferred tax asset / (liability) is based on the average rate and the end of year average rate.

NetNCTAT_ASC—CTA
Total CTA for deferred tax.

NetNEOY_ASC—EOY Deferred Tax Asset / (Liability)
The deferred tax balance at the end of the year. This symbol is calculated and is the sum of the above symbols.

Deferred Tax Rollfoward - Scheduling Elements

The following scheduling elements appear in the report:

NetNEOY1_ASC—Balance Reversing in Year 1
This column represents the amount reversing in the first year.
NetNEOYNBR1_ASC—NBR Balance Reversing in Year 1
This column represents the national benefit of region amount reversing in the first year.
NetNEOYT1_ASC—Total Balance Reversing in Year 1
This column represents the total amount reversing in the first year.
NetNEOY2_ASC—Balance Reversing in Year 2
This column represents the amount reversing in the second year.
NetNEOYNBR2_ASC—NBR Balance Reversing in Year 2
This column represents the national benefit of region amount reversing in the second year.
NetNEOYT2_ASC—Total Balance Reversing in Year 2
This column represents the total amount reversing in the second year.
NetNEOY3_ASC—Balance Reversing in Year 3
This column represents the amount reversing in the third year.
NetNEOYNBR3_ASC—NBR Balance Reversing in Year 3
This column represents the national benefit of region amount reversing in the third year.
NetNEOYT3_ASC—Total Balance Reversing in Year 3
This column represents the total amount reversing in the third year.
NetNEOY4_ASC—Balance Reversing in Year 4
This column represents the amount reversing in the fourth year.
NetNEOYNBR4_ASC—NBR Balance Reversing in Year 4
This column represents the national benefit of region amount reversing in the fourth year.

NetNEOYT4_ASC—Total Balance Reversing in Year 4
This column represents the total amount reversing in the fourth year.

NetNEOY5_ASC—Balance Reversing in Year 5
This column represents the amount reversing in the fifth year.
NetNEOYNBR5_ASC—NBR Balance Reversing in Year 5
This column represents the national benefit of region amount reversing in the fifth year.
NetNEOYT5_ASC—Total Balance Reversing in Year 5
This column represents the total amount reversing in the fifth year.
NetNTYr_ASC—Total Balance Reversing Years
This column represents the total amount reversing over the five-year period.

Deferred Tax Rollforward report (NA0401)

Tax Provision automatically calculates the deferred tax rollforward based on the values in the Temporary Differences input app and the national tax rates. The Tax Administrator designates temporary differences as either current or non-current in order to correctly classify the resulting deferred tax asset / (liability) on the deferred tax report and the income tax disclosure. Tax Provision automatically classifies positive values as assets and negative values as liabilities.

Note: For more information on reports, see "Working with reports".

The deferred tax rollforward shows the current period deferred tax activity for an entity for temporary differences, net operating losses, tax credits, and valuation allowances.

This report contains tax-affected data for the accounts that appear in the Temporary Differences input app (NA0301) and contains the Deferred Tax Rollforward elements.

To review the Deferred Tax Rollforward report:

In the Tax Provision navigation pane, click Reports.
Expand National Annual.
Use the drop-down list or the symbol selector to select the appropriate entity.
For more information, see “Using the Symbol Selector”.
Click NA0401 - Deferred Tax Rollforward.rtp. The report opens in the workspace.

Review the account values for each appropriate element. The accounts in this report are identical to the Temporary Differences input app (NA0301) except that the following Deferred Tax Netting accounts are included:

Symbol	Description	Source
NetAdjLegalEnt_ASC—Netting Adjustment - Legal Entity	Legal entity netting adjustment.	Automated (Flows from Deferred Tax Netting calculation). This account is used to net the total deferred tax amount for a legal entity as an asset or a liability on a current and non-current basis. The netting method depends on your calculation level settings. Netting is always calculated for all accounts, and if calculation level is set, netting is also calculated using the calculation level parent.
NatDefTaxLegalEntNet_ASC—Deferred Taxes (After Legal Entity Netting)	Deferred taxes after legal entity netting.	Total (NatDefTaxBeforeNet_ASC + NetAdjLegalEnt_ASC)
NetAdjLegalEntGrp_ASC—Netting Adjustment - Legal Entity Grouping	Legal entity grouping netting adjustment.	Automated (Flows from Deferred Tax netting calculation). This account is used to net the total deferred tax amount for a legal entity grouping as an asset or a liability on a current and non-current basis.
NatDefTax_ASC—Deferred Taxes (After Netting)	Deferred taxes after netting.	Total (NatDefTaxLegalEntNet_ASC + NetAdjLegalEntGrp_ASC)

Deferred Tax Rollforward - Scheduling report (NA0402)

Entities using the deferred tax scheduling methodology use the same format and calculations as the deferred tax rollforward with the following differences:

The end of period deferred tax balance is based on the sum of the deferred tax balances for each of the scheduled years. Since the tax rates may differ during the years over which the temporary difference is expected to reverse, the ending balance is a sum of the calculated deferred tax balances for each year.
The tax rate change is based on the average deferred tax rate calculated by dividing the ending deferred tax balance as calculated by the end of period gross temporary difference and not on the deferred tax rates entered in the Tax Rates input app (XNC0201 or XNC1201).

Note: For more information on reports, see "Working with reports".

To review the Deferred Tax Rollforward - Scheduling report:

In the Tax Provision navigation pane, click Reports.
Expand National Annual.
Use the drop-down list or the symbol selector to select the appropriate entity.
For more information, see “Using the Symbol Selector”.
Click NA0402 - Deferred Tax Rollforward - Scheduling.rtp. The report opens in the workspace.
Review the account data for each scheduling period.
For information on the accounts in this report, see “Temporary Differences input app (NA0301)”.

Deferred Tax Rollforward - Scheduling report - MR (NA0402)

Entities using the deferred tax scheduling methodology in a multi-regional provision use the same format and calculations as the deferred tax rollforward with the following differences:

The end of period deferred tax balance is based on the sum of the deferred tax balances for each of the scheduled years. Since the tax rates may differ during the years over which the temporary difference is expected to reverse, the ending balance is a sum of the calculated deferred tax balances for each year.
The tax rate change is based on the average deferred tax rate calculated by dividing the ending deferred tax balance as calculated by the end of period gross temporary difference and not on the deferred tax rates entered in the Tax Rates input app (XNC0201 or XNC1201).

Note: For more information on reports, see "Working with reports".

To review the Deferred Tax Rollforward - Scheduling – MR report:

In the Tax Provision navigation pane, click Reports.
Expand National Annual.
Use the drop-down list or the symbol selector to select the appropriate entity.
For more information, see “Using the Symbol Selector”.
Click NA0402 - Deferred Tax Rollforward – Scheduling - MR.rtp. The report opens in the workspace.
Review the account data for each scheduling period.
For information on the accounts in this report, see “Temporary Differences input app (RA0301)”.

Deferred Tax Classification report (NA0403)

This report shows the breakdown of the deferred tax asset / (liabilities) into one of the following classifications:

Current Deferred Tax Asset
Current Deferred Tax Liability
Non-Current Deferred Tax Asset
Non-Current Deferred Tax Liability

The classification of these items is based on:

The “Current or Non-Current” column. This setting determines whether the balance is classified in the Current or Non-Current columns.
The balance in symbol NetNEOY_ASC—EOY Deferred Tax Asset/(Liability). If this balance is positive, the amount is classified as an asset. If this balance is negative, the amount is classified as a liability.

The deferred tax ending balance is considered an asset if:

For all temporary differences except valuation allowances:
NetNEOY_ASC > 0 or NetNEOY_ASC = 0 and NetNBOYA_ASC > 0 or NetNEOY_ASC = 0, NetNBOYA_ASC = 0, and NetNBOY_ASC > 0
For valuation allowance accounts, the sign is reversed:
NetNEOY_ASC < 0 or NetNEOY_ASC = 0 and NetNBOYA_ASC < 0 or

NetNEOY_ASC = 0, NetNBOYA_ASC = 0, and NetNBOY_ASC < 0

Otherwise, the ending balance is considered a liability.

Note: For more information on reports, see "Working with reports".

This report contains the following symbols in the Elements dimension (across):

NetNCA_ASC—Deferred Tax Asset - Current
This column represents the amount of deferred tax classified as a current asset.
NetNCL_ASC—Deferred Tax Liability - Current
This column represents the amount of deferred tax classified as a current liability.
NetNNA_ASC—Deferred Tax Asset – Non- Current
This column represents the amount of deferred tax classified as a non-current asset.
NetNNL_ASC—Deferred Tax Liability – Non-Current
This column represents the amount of deferred tax classified as a non-current liability.
NetNTot_ASC—Total
This column represents the total classification.

To review the Deferred Tax Classification report:

In the Tax Provision navigation pane, click Reports.
Expand National Annual.
Use the drop-down list or the symbol selector to select the appropriate entity.
For more information, see “Using the Symbol Selector”.
Click NA0403 - Deferred Tax Classification.rtp. The report opens in the workspace.
Review the account values for each appropriate element.
For detailed information on the accounts in this report, see “Temporary Differences input app (NA0301)”.

Deferred Tax - for Tax Account Rollforward report (NA0404)

This report shows the breakdown of the deferred tax rollforward into further detail for each Element, for use in Tax Account Rollforward mappings.

The deferred tax rollforward is classified as one of the following:

Current Deferred Tax Asset
Current Deferred Tax Liability
Non-Current Deferred Tax Asset
Non-Current Deferred Tax Liability

The classification of these items is based on:

The “Current or Non-Current” column. This setting determines whether the balance is classified in the current or non-current columns.
The balance in symbol NetNEOY_ASC—EOY Deferred Tax Asset/(Liability). If this balance is positive, the amount is classified as an asset. If this balance is negative, the amount is classified as a liability.

Note: For more information on reports, see "Working with reports".

The deferred tax ending balance is considered an asset for all deferred tax accounts except valuation allowances if the value in element NetNEOY_ASC—EOY Deferred Tax Asset/(Liability) is greater than zero. For the valuation allowance accounts, the balance is treated as an offset to the asset balance if the value in element NetNEOY_ASC—EOY Deferred Tax Asset/(Liability) is less than zero. Otherwise, the ending balance is considered a liability.

Your Administrator can use the Current and Deferred Tax editor to indicate the account level at which the classification of the deferred tax balances is determined. The highest level account selected is used as the classification level.

For more information, see the Longview Tax Administrator’s Guide.

In addition to the above classification processes, Tax Provision also reviews the classification of balances between the end of the period and the beginning of the year to determine if there has been a change in the overall classification of deferred balances (i.e. current asset at beginning of year is a current liability at the end of the period). If there is a classification change, the reclass elements provide the adjustment that is mapped to the Tax Account Rollforward to automate the reclassification adjustment (reflected in the Reclassification of Deferred Tax Accounts row of the tax account rollforward).

This report contains the following symbols in the Elements dimension (across):

NetNEOY_ASC—EOY Deferred Tax Asset/(Liability)
The deferred tax balance at the end of the year.

NetNClass_ASC—National Tax Classification
The parent element of the classified deferred tax rollforwards for Current Asset, Current Liability, Non-Current Asset, and Non-Current Liability, along with their related beginning of year reclass adjustments.

To review the Deferred Tax - for Tax Account Rollforward report:

In the Tax Provision navigation pane, click Reports.
Expand National Annual.
Use the drop-down list or the symbol selector to select the appropriate entity.
For more information, see “Using the Symbol Selector”.
Click NA0404 - Deferred Tax - for Tax Account Rollforward.rtp. The report opens in the workspace.
Review the account values for each appropriate element.
For detailed information on the accounts in this report, see “Temporary Differences input app (NA0301)”.

Published: January 07, 2024 09:11