Tax Provision is a comprehensive global tax provision solution for multinational companies reporting under US GAAP or IFRS. The solution encompasses all stages of the corporate tax provision process, including tax automation, data collection, tax provision calculation, return-to-accrual automation, and tax reporting and analysis.
Tax Provision is designed to provide a starting point for a new implementation of a Tax Provision application. The Tax Provision application is built using Financial Management and leverages all functionality provided with Financial Management.
Tax Provision calculates your company’s global tax provision, effective tax rate, and deferred tax for tax provisioning purposes. The application is designed to comply with the standards for accounting for income taxes under US GAAP, ASC740 and IFRS, IAS12.
Furthermore, Tax Provision may use the same platform as your corporate close process and therefore may be directly integrated utilizing the same metadata. As one solution, consolidated pretax income can be reported by legal entity to calculate the consolidated income tax provision. When corporate accounting finalizes the period-end close and all required amounts—such as permanent and temporary differences, tax rates, and foreign exchange rates—are entered in the system, Tax Provision automatically calculates the current and deferred income tax provisions by legal entity and by jurisdiction.
From the provision calculation, Tax Provision produces a journal entry and draft income tax financial statement disclosure, complete with supporting schedules. The supporting schedules provide details for the required disclosures in the income tax footnote to the financial statements, including:
Pretax income by foreign and domestic entities
Consolidated tax provision by current and deferred tax expense
Consolidated and statutory effective tax rate reconciliations
Composition of deferred tax assets, liabilities, and valuation allowance (as required)
Tax loss expiration table