Updating and reviewing the current tax charge

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Published: January 07, 2024 09:12

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Tax Provision calculates a current regional tax charge for each entity using the following calculation:

start with regional tax base
plus regional permanent and temporary differences
equals regional taxable income/loss before net operating losses
plus regional net operating losses
equals regional taxable income/loss
multiplied by the regional tax rate
equals regional tax charge
minus regional tax credits
plus regional additional tax charge items
equals total regional tax charge

Regional tax base
These values are automatically populated from the Current Tax Charge input app (NA1201).
Regional income tax adjustment
These values are a combination of automated Regional tax addback from the national current tax charge and manual amounts that allow for adjustments to the automated values.
Regional net operating losses
Regional net operating losses generated in the current year and deferred are manually input in the Current Tax Charge input app (RA1201) and automatically flow to the gross temporary difference roll forward and thereby automate the calculation of the related deferred tax asset. Loss carryforwards, utilized in the current year, are manually input in the Current Tax Charge input app (RA1201) in order for the system to properly calculate the impact of the utilization. The system then tracks loss carryforwards in the gross temporary difference roll forward but not the detailed composition (by year, expired, etc.).
Regional tax credits
Regional tax credits utilized in the current year are input in the Current Tax Charge input app (RA1201) and automatically flow to the Temporary Differences input app (RA1301) and thereby automate the calculation of the related deferred tax asset. The system then tracks tax credit carryforwards in the gross temporary difference roll forward but not the detailed composition (by year, expired, etc.).
Regional Additional tax charge items
These values are manual adjustments entered on a tax-affected basis. The Tax Provision system has additional tax charge items (APIs), which are on a tax-affected basis and manually input. These items are used for taxes that are not based on taxable income multiplied by a tax rate (i.e. Texas margin tax) or other adjustments that are reported in the current tax charge of the regional tax process (i.e. UTP). These additional tax charge items generally impact the overall tax charge and are also reflected in the ETR report as rate reconciliation adjustments. The Regional income tax charge, as calculated above, automatically flows to the national current tax charge as a Regional income tax deduction. It is recognized that the Longview calculation methodology may differ from the current Microsoft Excel-based tax charge process, and therefore, arrive at a different result for the FY2015 tax charge calculation. However, any differences are auditable and can be reviewed with your tax project team members.

Current Tax Charge input app (RA1201)

Use this input app to review and post adjustments to the automated pre-tax income and permanent and temporary difference amounts. If you are using Income/Equity/OCI, you can also use this input app to calculate the regional current tax charge relating to equity and other comprehensive income activity.

This input app includes Analyze functionality. For more information, see “Analyzing data for automation source information”.

This input app contains the GrsCY_IAS—Current Year (Income Statement) symbol in the Elements dimension (across).

To update the regional current tax charge:

In the Tax Provision navigation pane, click Data Collection.
Expand Regional Annual.
Use the drop-down list or the symbol selector to select the appropriate entity.
For more information, see “Using the Symbol Selector”.
Click RA1201 - Current Tax Charge.lvapp. The input app opens in the workspace.

Expand the DedIncTaxRT—Total Deductible Income Taxes Reversal category, and enter data for the following symbols:

Symbol	Description
RegIncTaxR—Regional Income Taxes Reversal	Use this symbol to reverse the regional income tax from the national current provision.
OthIncTaxR—Other Income Taxes Reversal	Use this symbol to reverse the other income tax from the national current tax charge.
RegIncTaxRAdj—Regional Income Taxes Reversal Adjustment	Use this symbol to make a manual adjustment to the regional income taxes reversal.

Enter any regional permanent and temporary differences for the following accounts:
Symbol
Description
RPxxx—Company-specific
Company-specific adjustments to regional permanent differences.
RTxxx—Company-specific
Company-specific adjustments to regional temporary differences.

Expand RegNLossT_IAS—Total Regional Tax Loss category, and enter data for the following symbols:

Symbol	Description
RegNLossCYGA_IAS—Regional Tax Loss - CY Generated – Adjustment	Manual adjustment for the calculated net operating loss.
RegNLossCYU_IAS—Regional Tax Loss - CY Utilized	Utilization of an existing net operating loss carryforward in the current period.
RegNLossCA_IAS—Regional Tax Loss - Consolidating Adjustment	Impact of any consolidated level adjustment to net operating losses at the legal entity level.

For RegTaxCrPrm—Regional Tax Credits - Permanent, enter the Permanent regional foreign tax credits.

Expand the RegTaxCrT—Total Regional Tax Credits category, and enter data for the following symbols:

Symbol	Description
RegOthTaxCY—Regional Other Tax Credits - Temporary - Current	Current regional tax credits.
RegOthTaxNC—Regional Other Tax Credits - Temporary - Non-Current	Non-current regional tax credits.

Expand the RegAddCurrentM_IAS—Additional Provision Items - Manual category, and enter data for the following symbols:

Symbol	Description
RegAddCurrentM001_IAS—Other Additional Charge	This account can be used to enter any other additional charges that impact the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.
RegAddCurrentM002_IAS—Other Taxes	This account can be used to enter any other taxes (e.g. capital taxes, foreign taxes) that impact the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.
RegAddCurrentM003_IAS—Tax Holiday	This account can be used to enter the impact of any Tax Holidays from jurisdictions in which there is currently no tax rate or a lower tax rate. The value entered impacts the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.
RegAddCurrentM004A_IAS—UTP Tax – Permanent Differences - Regional	Use this symbol to enter the tax impact from regional level Uncertain Tax Positions (UTP) related to permanent differences. The value entered impacts the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.
RegAddCurrentM004B_IAS—UTP Tax – Temporary Differences - Regional	Use this symbol to enter the tax impact from regional level Uncertain Tax Positions (UTP) related to temporary differences. The value entered impacts the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.
RegAddCurrentM004T_IAS— UTP Tax - Regional	This symbol represents the UTP Tax National total. This symbol is the sum of account RegAddCurrentM004A_IAS and account RegAddCurrentM004B_IAS.
RegAddCurrentM005_IAS—UTP Regional Interest	Use this symbol to enter the current period interest accrued related to regional level Uncertain Tax Positions (UTP). The value entered impacts the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.
RegAddCurrentM006_IAS—UTP Regional Penalty	Use this symbol to enter the current period penalties related to regional level Uncertain Tax Positions (UTP). The value entered impacts the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.
RegAddCurrentM007_IAS—UTP Regional Tax re: Interest Paid	Use this symbol to enter the current period interest paid related to regional level Uncertain Tax Positions (UTP). The value entered impacts the current tax charge and Effective Tax Rate report. The value in this account is entered on an after tax basis.

When you are finished, click Submit.

Current Tax Charge - Equity input app (RA1202)

If you are using the Income/Equity/OCI setting, you can use this input app to calculate the regional current tax charge relating to equity and other comprehensive income activity. Use this input app to enter amounts that were booked directly in equity but are relevant to tax, and the regional current tax charge is calculated on these amounts.

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

GrsEq_IAS—Equity
Use this column to enter activity during the year that increases or decreases the gross temporary difference but does not have an impact on the current tax charge (the impact is to an account other than the income statement, such as Goodwill).
GrsOCI_IAS—OCI
Use this column to enter activity during the year that increases or decreases the gross temporary difference and impacts other comprehensive income. Values in this column do not impact the tax charge.

To update the regional current tax charge - equity and other comprehensive income:

In the Tax Provision navigation pane, click Data Collection.
Expand Regional Annual.
Use the drop-down list or the symbol selector to select the appropriate entity.
For more information, see “Using the Symbol Selector”.
Click RA1202 - Current Tax Charge - Equity.lvapp. The input app opens in the workspace.
Enter the equity and OCI temporary difference movements for the appropriate accounts.
For information on the accounts in this input app, see Current Tax Charge input app (RA1201).
When you are finished, click Submit.

Published: January 07, 2024 09:12