1. User's Guide
  2. Using Tax Provision
  3. Tax Basis Balance Sheet

Tax Basis Balance Sheet

The following figure shows a sample Tax Basis Balance Sheet.


Sample Tax Basis Balance Sheet

Description of the Tax Basis Balance Sheet columns based on the provided configuration:

  1. Trial Balance Closing Balance: This is automatically populated from the balance sheet loaded in P12.

  2. Trial Balance Closing Balance Manual Adjustments: These are manual adjustments to adjust Assets/Liabilities as necessary.

  3. Trial Balance Closing Balance: This is the roll-up of columns 1 and 2.

  4. Closing Balance: This is automatically populated from the Temporary Differences schedule in P12.

  5. Tax Basis BS Preliminary: This is the roll-up of columns 3 and 4.

  6. Current Year Tax Data (Book Accounts): This is the balance sheet manually loaded/ uploaded through FDM or Smart View that was used to prepare the tax return (final).

  7. Current Year Tax Data (Tax Accounts): This is the cumulative (closing) Temporary Differences manually loaded/ uploaded through FDM or Smart View that were determined in the preparation of the tax return.

  8. Current Year Tax Data: This is the roll-up of columns 6 and 7. The tax basis balance sheet is based on the tax return filing.

  9. Tax Basis Balance Sheet Variance: This is the difference between the tax basis balance sheet per the tax accounting records and the tax return as filed.

Timing

This schedule can be run during any period in the year. It details the tax basis balance sheet detail (columns 1-5) based on the accounting records, including the closing temporary difference per the tax accounting records. To complete the analysis during the year, you must perform all the necessary steps to determine the actual tax basis balance sheet as if the return was filed. For example, many companies estimate the difference between book and tax depreciation for the tax provision/tax accounting records and true it up when the return is filed. If this is your approach, then the accounting records would include an estimate of the closing temporary difference as opposed to the actual closing temporary difference. Therefore, for periods other than P12, you must calculate the tax basis in columns 6-8 to derive an actual tax basis balance sheet. The determination of an actual tax basis balance sheet during interim periods (periods 1-1) can be done, but generally is not performed.

Automation

This functionality is developed to maximize automation but also provide options for completion. Although columns 1-5 are in automated in the system, you can optionally automate columns 6-8. The options are to:

  • Complete the tax return in P13, including deferreds, and then map the trial balance and closing temporary differences to this schedule. This would require some minor customization.

  • Upload the final trial balance and closing temporary differences based on the tax return to column 6 and 7 respectively with Smart View or FDM.