Example of Reporting Output Taxes for Tax Setup Options on Receivables Activities in the Tax Register and Nonrecoverable Tax Register

The following scenario illustrates the reporting difference between the Tax Register and the Nonrecoverable Tax Register for an adjustment with nonrecoverable tax.

Receivables Invoice

The following table shows the accounting entries for an Oracle Fusion Receivables invoice that has two transaction lines, each with a different tax rate.

Account	Debit Amount	Credit Amount	Description
Receivable	1140.00
Revenue		600.00
Tax		60.00	Tax at 10%
Revenue		400.00
Tax		80.00	Tax at 20%

Adjustments

An adjustment for -100.00 USD is made against the invoice, reducing the receivable to 1040.00 USD. Assume the following settings for the Receivables activity for this adjustment:

Receivables Activity Option	Setting
GL Account Source	Revenue on Invoice
Tax Rate Code Source	Invoice
Recoverable	Yes

This table shows the accounting entries created as a result of this adjustment:

Account	Debit Amount	Credit Amount	Description
Revenue	52.63		Revenue at 10%
Revenue	35.09		Revenue at 20%
Tax	5.26		Tax at 10%
Tax	7.02		Tax at 20%
Receivable		100.00

A second adjustment is made against the invoice for -200.00 USD. Assume the following settings for the Receivables activity for this adjustment:

Receivables Activity Option	Setting
GL Account Source	Revenue on Invoice
Tax Rate Code Source	Invoice
Recoverable	No

This table shows the accounting entries created as a result of this adjustment:

Account	Debit Amount	Credit Amount	Description
Revenue	105.26		Revenue at 10%
Revenue	70.18		Revenue at 20%
Nonrecoverable Tax	10.52		Tax at 10%
Nonrecoverable Tax	14.04		Tax at 20%
Receivable		200.00

Tax Register

For the 10 percent tax, the Tax Register shows:

Transaction Number	Transaction Class	Taxable Amount	Tax Amount
Inv-Test2	Invoice	600.00	60.00
Adj-1	Adjustment	-52.63	-5.26

For the 20 percent tax, the Tax Register shows:

Transaction Number	Transaction Class	Taxable Amount	Tax Amount
Inv-Test2	Invoice	400.00	80.00
Adj-1	Adjustment	-35.09	-7.02

Both the item lines and the adjustment that was recorded when the Recoverable setting was set to Yes are reported in the Tax Register.

Nonrecoverable Tax Register

For the 10 percent tax, the Nonrecoverable Tax Register shows:

Transaction Number	Transaction Class	Taxable Amount	Tax Amount
Adj-2	Adjustment	-105.26	-10.52

For the 20 percent tax, the Nonrecoverable Tax Register shows:

Transaction Number	Transaction Class	Taxable Amount	Tax Amount
Adj-2	Adjustment	-70.18	-14.04

Only the adjustment that was recorded when the Recoverable setting was set to No is reported in the Nonrecoverable Tax Register.