Expiration

When you set an expiration rule for an account, the amount in the Tax Detail account will be offset automatically for current year and below year of expirations.

Automatic expiration takes place after automatic deferral or utilization for the current entity, scenario, year and period has completed. It occurs regardless of the amount of Taxable Income + Special Deductions (TaxableIncomeBeforeLoss + TaxSpecialDeductions).

You can set up rules for the system to automatically expire losses that will no longer be available for utilization after the current period.

After you define the NOL Automation expiration rule and then run Force Calculate, the system expires all losses that will be not be available for utilization after the current period.

The Tax Losses form shows the expired losses in the Expiration Automated (TLCExpirationAutomated) column for the detail account for the current year and corresponding Year of Expiration.

The Temporary Differences form shows the expired amount for each target Carryforward account under the Other Adjustments (Deferred Only) column for the current year and period.

Expired losses do not show up in the Current Provision form.

The expiration logic aims to expire all available amounts that have a year of expiration that is less than the current year for a specified detail account. Losses whose year of expiration is the current year will only be expired in the last period the year, for example, P12.

The system determines the loss amount to be expired based on the TLCAvailable column in the Tax Losses form for the year of expiration for the detail account.

Example

TaxableIncomeBeforeLoss + TaxSpecialDeductions = 28,000

Current year: 2012

Current period: P12

Current entity: LE105

TaxLossD0001  TaxLossD0002  
Year of ExpirationTLCAvailableExpiration AutomatedYear of ExpirationTLCAvailableExpiration Automated
201020,000-20,00020125,000-5000
201110,000-10,000201310,000