Configuring Accounts for VA Allocation Calculations

Tax Provision provides a classification property and alternate hierarchy specifically for the classification of Current and NonCurrent Deferred Tax Assets, to be used in the Valuation Allowance Allocation calculation in accordance with US GAAP.

  To configure accounts for VA Allocation calculations:

  1. Set the VAClassification global property to Yes on the TaxSettings account to allow Valuation Allowance Allocation for the Tax accounts.

  2. Define the alternate hierarchy for VAClassification or Financial Statement purposes. See Valuation Allowance Allocation Calculation.

    • For VA Allocation Classification, use the VAClassification hierarchy under Tax Settings.

    • For Financial Statement Classification, use the BSClassification hierarchy.

  3. Set the Classification Level property to No for the base member, and Yes for any member in its ancestry chain.

  4. Define the TARF1 user-defined property on DataCategory members (TARFDeferredVAAllocCurrent) and TARFDeferredVAAllocNonCurrent), based on their classification (VA Allocation or Financial Statement), to move the members to the Tax Account Rollforward schedule.

    • For VA Allocation Classification, set TARF1:VACurrent, or TARF1:VANonCurrent.

    • For Financial Statement Classification, set TARF1:Current and TARF1NonCurrent.