Statutory and Consolidated Effective Tax Rate (ETR)

Oracle Hyperion Tax Provision calculates the Effective Tax Rate (ETR) reconciliation automatically at the statutory and consolidated rates. The statutory and consolidated rate reconciliation forms capture the following items on a pretax and tax-effected basis:

• Net Income Before Tax Adjusted

• GAAP to STAT permanent differences

• STAT to TAX permanent differences

• Regional and additional taxes

• Special Deductions

• Change in valuation allowance

• Foreign rate difference (consolidated ETR)

• Additional provision items

• Effective tax rate

The consolidated rate reconciliation starts with the global statutory tax rate to reconcile to an entity’s tax rate using the categories noted above. The statutory rate reconciliation calculation is similar to the consolidated rate reconciliation, but the starting point is based on the entity’s statutory tax rate and, therefore, there is no foreign rate difference.

The rate reconciliation automatically calculates the tax impact of reconciling items as a percentage of pretax net income before taxes as adjusted. The system provides the ability to drill down to the lowest level of detail of each of the above reconciling items to view the contribution of each item to the overall effective tax rate, depending on the level of information that is entered.

The foreign rate difference is calculated by taking the difference between the consolidated tax rate and the statutory tax rate and multiplying it times Net Income Before Tax Adjusted, GAAP to STAT permanent differences and STAT to TAX permanent differences.