Updating Gross Temporary Difference Rollforward Activity

Once you import data, Tax Provision automatically calculates and populates pre-tax income and permanent and temporary differences. You can then access an input app to review and post adjustments to the automated amounts for pre-tax income and permanent/temporary differences. In addition, you can manually adjust permanent and temporary differences and any additional provision items. When you change temporary differences, the Current Provision and all related reports (for example, temporary differences and deferred tax reports) are automatically updated as well.

Each temporary difference is set up as either “Current” or “Non-Current” for balance sheet classification purposes. Classifications are set by the Tax Administrator. To view these classifications, open the Temporary Differences Classification report (NA0304).

Net operating losses and loss deductions

If your company is in a current year loss position, you must make a manual adjustment in the Current Provision input app (NA0201) is to reverse the loss. If your company is able to utilize a net operating loss carryforward, you must manually adjust the Current Provision input app (NA0201) to reduce the taxable income to the appropriate amount. The value for Net Operating Loss - Carryforward is automatically updated in the Temporary Differences input app (NA0301) and the related reports.

Tax credits

Tax Provision allows you to track credits in the gross temporary difference rollforward as defined in the current provision section. Input the impact of the tax credit on the current provision in the Current Provision input app (NA0201), and enter any other adjustments to the tax credit carryforward in the Temporary Difference elements or the Temporary Differences - Balance Sheet Method elements. Enter credits in the gross temporary difference rollforward using the tax value as the gross amount, since Tax Provision uses a 100% tax rate for these items.

Valuation allowances

Tax Provision provides the following valuation allowance accounts:

• Current temporary differences
• Non-Current temporary differences
• Net operating losses
• Tax credits

Tax Provision is set up to meet the requirements of ASC 740 so that the total valuation allowance is allocated between the current and non-current assets in proportion to the respective values of the current and non-current deferred tax assets. For example, if the total valuation allowance is $500,000 with gross current deferred tax assets of $250,000 and gross non-current deferred tax assets of $750,000 (non-current temporary differences, net operating losses, and credits), the valuation allowance is allocated $125,000 (25%) to current and $375,000 (75%) to non-current.

Note: All valuation allowances should be negative values except for current year or other adjustment amounts that are meant to reduce the valuation allowance.

Understanding Elements for temporary differences

The elements that display in the Temporary Differences input app (NA0301) change depending on the method you are using.

Deferred Tax Proof elements

If you are using the Temporary Difference method, you can use a deferred tax proof analysis to view national gross and deferred tax balances. This process allows you to define the accounting basis, the tax basis, and the portion that may be permanent in nature. The system then uses this information to calculate the ending cumulative temporary difference.

If you are using the Temporary Difference method, the following elements appear in the input app:

GrsTD_Accounting_Calc_ASC — Accounting Basis - Calc

This element represents the calculated ending accounting basis for a temporary difference or other carryforward account based on the deferred tax automation settings.

GrsTD_Accounting_Adj_ASC — Accounting Basis - Adj

If you are automating the ending accounting basis, you can use this element to adjust the value in the calculated element. If you are not automating the accounting basis, use this element to input the ending accounting basis value.

GrsTD_AccountingTotal_ASC — Accounting Total

This element represents the sum of GrsTD_Accounting_Calc_ASC and GrsTD_Accounting_Adj_ASC.

GrsTD_Tax_Calc_ASC — STAT/Tax Basis - Calc

This element represents the calculated ending tax basis for a temporary difference or other carryforward account based on the deferred tax automation settings.

GrsTD_Tax_Adj_ASC — STAT/Tax Basis - Adj

If you are automating the STAT/Tax basis, you can use this element to adjust the value in the calculated element. If you are not automating the STAT/Tax basis, use this element to input the ending STAT/Tax basis value.

GrsTD_TaxTotal_ASC — STAT/Tax Basis - Total

This element represents the sum of GrsTD_Tax_Calc_ASC and GrsTD_Tax_Adj_ASC.

GrsTD_BasisDifference_ASC — Basis Difference

This element represents the value in element GrsTD_TaxTotal_ASC less the value in GrsTD_AccountingTotal_ASC.

GrsTD_PermBasis_ASC — Permanent Component

Use this element to enter the portion of the difference between the ending tax basis and accounting basis that is permanent in nature.

GrsTD_TemporaryDifference_ASC — Total Temporary Difference

This element represents the value in element GrsTD_BasisDifference_ASC less the value in the permanent portion element.

Temporary Difference elements

If you are using the Temporary Difference method, the following elements appear in the input app:

CURNONCUR — Current or Non-Current

This column identifies the temporary difference account as current or non-current.

ISEQCAT — Income, Equity, or OCI

Specifies whether the account is classified as Income, Equity, or OCI.

GrsBOY_ASC — Beginning of Year

This column represents the prior year end gross temporary differences. It is populated automatically through the annual and monthly rollover process.

GrsPY_ASC — Prior Year Adjustment

This column is used in the rare circumstance that the beginning of year deferred tax asset / (liability) must be restated with no impact on the provision. This adjustment impacts only the beginning balance of the deferred tax asset / (liability) and does not impact the deferred provision. You must enter values for this symbol manually.

GrsBOYA_ASC — BoY - as Adjusted

This column represents the beginning of year balance after adjustments and is calculated (GrsBOY_ASC + GrsPY_ASC).

Temporary Differences input app (NA0301)

Use this input app to update national actual temporary difference accounts.

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

The elements in this input app differ depending on the method your company uses. For more information, see Understanding Elements for temporary differences.

To update temporary differences:

1. In the Tax Provision navigation pane, click Data Collection.
2. Expand National Annual.
3. Use the drop-down list or the symbol selector to select the appropriate entity. For more information, see Using the Symbol Selector.
4. Click NA0301 - Temporary Differences.lvapp. The input app opens in the workspace.
5. Expand the TempT — Total Temporary Differences category, and enter data for the following accounts for each appropriate symbol in the Elements dimension:

   1. GTxxx — Company specific: Company-specific GAAP to STAT temporary differences.

   2. STxxx — Company specific: Company-specific STAT to Tax temporary differences.

6. Expand the NatTmpCFDLoss_ASC — Total National Temporary Differences, Carryforwards and NOLs category, and enter data manually for the following accounts for each appropriate symbol in the Elements dimension:

   1. CharNC — Charitable Contributions Carryforward - Non-Current: Non-current charitable contributions carried forward from the previous year.

   2. CharCY — Charitable Contributions Carryforward - Current: Current charitable contributions carried forward from the previous year.

   3. LTCapLossNC — Long Term Capital Loss Carryforward - Non-Current: Non-current long term capital losses carried forward from the previous year.

   4. LTCapLossCY — Long Term Capital Loss Carryforward - Current: Current long term capital losses carried forward from the previous year.

   5. NLossCYGA — Net Operating Loss - CY Generated - Adjustment: Manual adjustment for the calculated net operating loss.

   6. NLossCYU — Net Operating Loss - CY Utilized: Utilization of an existing net operating loss carryforward in the current period.

   7. NLossCA — Net Operating Loss - Consolidating Adjustment: Impact of any consolidated level adjustment to net operating losses at the legal entity level.

   8. NLossNC — Net Operating Loss - Non-Current: Any other activity related to net operating losses that are non-current.

7. Expand the TaxCrT — Total Tax Credits - Temporary category, and enter data for the following symbols:

   1. TaxCrForM — Foreign Tax Credits - Temporary - Manual: Temporary national foreign tax credits.

   2. NatTaxCrForCY — Creditable Foreign Tax Credits - Temporary: Creditable national foreign tax credits.

   3. NatTaxCrForCY — Non-creditable Foreign Tax Credits - Temporary: Non-creditable national foreign tax credits.

   4. TaxCrAMT — US Alternative Minimum Tax: US Alternative Minimum Tax (AMT).

   5. GenBusCr — General Business Credits: General business credits.

   6. TaxCrOth — Other Tax Credits - Temporary - Manual: Other temporary national tax credits.

8. Expand the NAttribT — Total National Tax Attributes category, and enter data for the following symbols:

   1. NatTaxAffTempCur — Tax Attribute - Current: Current tax attributes.

   2. NatTaxAffTempNonCur — Tax Attribute - Non-Current: Non-current tax attributes.

9. In the ValAllow — Total Valuation Allowance category, enter data manually for the following accounts for each appropriate symbol in the Elements dimension:

   1. NatValCT — Valuation Allowance - Current Temps: Valuation allowance - current temps.

   2. NatValNCT — Valuation Allowance - Non-Current Temps: Valuation allowance - non-current temps.

   3. NatValNOL — Valuation Allowance - NOLs: Valuation allowance - net operating losses.

   4. NatValTaxCr — Valuation Allowance - Credits: Valuation allowance - credits.

   5. NatValGWPA — Valuation Allowance - Goodwill/Purchasing Accounting: Valuation allowance - goodwill/purchasing.

10. When you are finished, click Submit.