Completing The Multi-Regional Pre-Provision Process

The following table outlines the pre-provision process for Tax Provision:

Note: If an owner of a partnership is locked for input, the partnership calculations will fail if changes are submitted to the partnership entity. You can correct this by running the failed partnership calculations for the partnership entity from the Tax Calculations interface once the lock on the owner is released.

Updating and reviewing multi-regional tax rates

If your company plans to use regional tax rates in Tax Provision, the regional tax rates must be updated for each entity for the current and prior years before the national tax rates can be updated.

Tax Rates input app (XRC0201 - Tax Rates - Multi-Regional)

Use these input app to specify the regional tax rates for each entity. You must enter regional tax rates using the gross rate. For example, if the tax rate is five percent, enter 5.00. This input app allows you to enter tax rates for the beginning of year, current year, or end of year for:

• the current and total tax provision/charge
• deferred tax movements and balances for tax losses and related valuation allowance.
• the deferred tax provision/charge for temporary differences classified current
• the deferred tax provision/charge for temporary differences classified non-current

To view the current configuration settings for the regional tax rates, use the Tax Rates Regional (XRC0201) report.

To update the regional tax rates:

1. In the Tax Provision navigation pane, click Data Collection.
2. Expand Rates.
3. Click XRC0201 - Tax Rates - Multi-Regional.lvapp.
4. The input app opens in the workspace.
5. Enter the following tax rates:

   1. REGPYR — Regional Tax Rate PYR: The regional statutory tax rate for the prior year. This rate is used in the calculation of the return to provision/prior year adjustment.

   2. REGCYR — Regional Tax Rate CYR: The regional statutory tax rate for the current year or period and is used in the calculation of:

      • the current provision/current tax charge
      • the current year activity in the deferred tax account
      • the foreign rate differential in the consolidated Effective Tax Rate Report
      • the current year rate change component in the deferred tax rollforward

   3. REGCURBOY — Regional Current Deferred Tax Rate - Beginning: The beginning of year deferred tax rate used for temporary differences classified as current. This rate is used in the calculation of:

      • the beginning of year deferred tax balance for temporary differences classified as current and the related valuation allowance (ASC only)
      • the beginning of year rate change component in the deferred tax rollforward

   4. REGCUREOY — Regional Current Deferred Tax Rate - Ending: The end of year deferred tax rate, which is used for temporary differences classified as current. This rate is used in the calculation of:

      • ending deferred tax asset/(liability) for the current temporary differences and the related valuation allowance (ASC only)
      • beginning of year and current year rate change components in the deferred tax rollforward

   5. REGNCBOY — Regional Non-Current Deferred Tax Rate Beginning: The beginning of year deferred tax rate, which is used for temporary differences classified as non-current. This rate is used in the calculation of:

      • the beginning of year deferred tax asset/liability for temporary differences classified as non-current and the related valuation allowance (ASC only)
      • the beginning of year rate change component in the deferred tax rollforward

   6. REGNCEOY — Regional Non-Current Deferred Tax Rate Ending: The end of year deferred tax rate to be used for temporary differences classified as non-current. This rate is used in the calculation of:

      • the ending deferred tax asset/liability for temporary differences classified as non-current and the related valuation allowance (ASC only)
      • the beginning of year and current year rate change components in the deferred tax rollforward
6. When you are finished, click Submit.

Administrators are often responsible for updating the regional tax rates for the current and deferred provisions; however, in some cases, you may be required to do so as well.

Note: If an entity uses the scheduling process, you must use the scheduled (5 years out) rates.

Tax Rates input app (XRC0201 - Tax Rates - Multi-Regional - Groups)

Use these input app to specify the regional tax rates for each entity. You must enter regional tax rates using the gross rate. For example, if the tax rate is five percent, enter 5.00. This input app allows you to enter tax rates for the beginning of year, current year, or end of year for:

• the current and total tax provision/charge
• deferred tax movements and balances for tax losses and related valuation allowance.
• the deferred tax provision/charge for temporary differences classified current
• the deferred tax provision/charge for temporary differences classified non-current

To view the current configuration settings for the regional tax rates, use the Tax Rates Regional (XRC0201) report.

To update the regional tax rates:

1. In the Tax Provision navigation pane, click Data Collection.
2. Expand Rates.
3. Click XRC0201 - Tax Rates - Multi-Regional.lvapp.
4. Select the region.
5. The input app opens in the workspace.
6. Enter the following tax rates:

   1. REGPYR — Regional Tax Rate PYR: The regional statutory tax rate for the prior year. This rate is used in the calculation of the return to provision/prior year adjustment.

   2. REGCYR — Regional Tax Rate CYR: The regional statutory tax rate for the current year or period and is used in the calculation of:

      • the current provision/current tax charge
      • the current year activity in the deferred tax account
      • the foreign rate differential in the consolidated Effective Tax Rate Report
      • the current year rate change component in the deferred tax rollforward

   3. REGCURBOY — Regional Current Deferred Tax Rate - Beginning: The beginning of year deferred tax rate used for temporary differences classified as current. This rate is used in the calculation of:

      • the beginning of year deferred tax balance for temporary differences classified as current and the related valuation allowance (ASC only)
      • the beginning of year rate change component in the deferred tax rollforward

   4. REGCUREOY — Regional Current Deferred Tax Rate - Ending: The end of year deferred tax rate, which is used for temporary differences classified as current. This rate is used in the calculation of:

      • ending deferred tax asset/(liability) for the current temporary differences and the related valuation allowance (ASC only)
      • beginning of year and current year rate change components in the deferred tax rollforward

   5. REGNCBOY — Regional Non-Current Deferred Tax Rate Beginning: The beginning of year deferred tax rate, which is used for temporary differences classified as non-current. This rate is used in the calculation of:

      • the beginning of year deferred tax asset/liability for temporary differences classified as non-current and the related valuation allowance (ASC only)
      • the beginning of year rate change component in the deferred tax rollforward

   6. REGNCEOY — Regional Non-Current Deferred Tax Rate Ending: The end of year deferred tax rate to be used for temporary differences classified as non-current. This rate is used in the calculation of:

      • the ending deferred tax asset/liability for temporary differences classified as non-current and the related valuation allowance (ASC only)
      • the beginning of year and current year rate change components in the deferred tax rollforward
7. When you are finished, click Submit.

Scheduling Tax Rates input app (XRC0204 - Scheduling Tax Rates - Multi-Regional - Groups)

Use this input app to specify the regional scheduled tax rates for group entities for regions that use scheduling. You must enter regional tax rates using the gross rate. For example, if the tax rate is five percent, enter 5.00.

To update scheduling tax rates:

1. In the Tax Provision navigation pane, click Data Collection.
2. Expand Rates.
3. Click XRC0204 - Scheduling Tax Rates – Multi-Regional - Groups.lvapp.
4. At the prompt, select the region to enter the scheduling tax rates for. This list is restricted to only those regions that use scheduling.
5. The input app opens in the workspace. For each region and entity group, enter the rate for amounts reversing in each of the following columns:

   1. GrsEOY1Rate - Tax Rate for Amount Reversing in Year 1: Specify the tax rate for amounts reversing in year one.

   2. GrsEOY2Rate - Tax Rate for Amount Reversing in Year 2: Specify the tax rate for amounts reversing in year two.

   3. GrsEOY3Rate - Tax Rate for Amount Reversing in Year 3: Specify the tax rate for amounts reversing in year three.

   4. GrsEOY4Rate - Tax Rate for Amount Reversing in Year 4: Specify the tax rate for amounts reversing in year four.

   5. GrsEOY5Rate - Tax Rate for Amount Reversing in Year 5: Specify the tax rate for amounts reversing in year five.

6. When you are finished, click Submit.

Scheduling Tax Rates input app (XRC0204 - Scheduling Tax Rates - Multi-Regional)

Use this input app to specify the regional scheduled tax rates for regions that use scheduling. You must enter regional tax rates using the gross rate. For example, if the tax rate is five percent, enter 5.00.

To update scheduling tax rates:

1. In the Tax Provision navigation pane, click Data Collection.
2. Expand Rates.
3. Click XRC0204 - Scheduling Tax Rates – Multi-Regional.lvapp.
4. The input app opens in the workspace displaying only those regions that use scheduling. For each region, enter the rate for amounts reversing in each of the following columns:

   1. GrsEOY1Rate - Tax Rate for Amount Reversing in Year 1: Specify the tax rate for amounts reversing in year one.

   2. GrsEOY2Rate - Tax Rate for Amount Reversing in Year 2: Specify the tax rate for amounts reversing in year two.

   3. GrsEOY3Rate - Tax Rate for Amount Reversing in Year 3: Specify the tax rate for amounts reversing in year three.

   4. GrsEOY4Rate - Tax Rate for Amount Reversing in Year 4: Specify the tax rate for amounts reversing in year four.

   5. GrsEOY5Rate - Tax Rate for Amount Reversing in Year 5: Specify the tax rate for amounts reversing in year five.

5. When you are finished, click Submit.

Updating and reviewing the multi-regional apportionment factors

Apportionment factors are used to apportion an entity’s taxable income to each region.

Scheduling Apportionment Factors input app (SS0014) - Separate

Use this input app to input apportionment factors for entities that have separate nexus with regions that use deferred tax scheduling.

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

• MSP_AppFactor_EOY1
• MSP_AppFactor_EOY2
• MSP_AppFactor_EOY3
• MSP_AppFactor_EOY4
• MSP_AppFactor_EOY5

These symbols represent the apportionment factors for amount reversing in years 1-5.

To update the scheduling apportionment factors

1. In the Tax Provision navigation pane, click Data Collection.
2. Expand Multi-Regional Annual.
3. Expand Separate.
4. Use the drop-down list or the symbol selector to select the appropriate entity. For more information, see Using the Symbol Selector.
5. Click SS0014 – Scheduling Apportionment Factors.lvapp. The input app opens in the workspace.

The regions (down) will be filtered to only regions the entity has separate nexus with and that use deferred tax scheduling.

Scheduling Apportionment Factors input app (SG0014) - Group

Use this input app to input apportionment factors for regions that have a regional group and use deferred tax scheduling.

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

• MSP_AppFactor_EOY1
• MSP_AppFactor_EOY2
• MSP_AppFactor_EOY3
• MSP_AppFactor_EOY4
• MSP_AppFactor_EOY5

These symbols represent the apportionment factors for amount reversing in years 1-5.

To update the scheduling apportionment factors

1. In the Tax Provision navigation pane, click Data Collection.
2. Expand Multi-Regional Annual.
3. Expand Group.
4. Use the drop-down list or the symbol selector to select the appropriate region. For more information on searching for symbols, see Using the Symbol Selector.
5. Click SG0014 – Scheduling Apportionment Factors.lvapp. The input app opens in the workspace.

The entities (nested down) will contain the entities belonging to the selected regions regional group.