Tax Provision Process

The Tax Reporting process enables you to prepare a full tax provision based on year-to-date numbers. The global provision process starts at the legal entity level in the desired reporting standard (for example, US GAAP or IFRS) and the local currency).

The following flowchart details the tax process of Tax Reporting.

Tax Provision Process

To begin the process, the Administrator imports the trial balance data by legal entity into Tax Reporting.

After the data is loaded, the Administrator runs the Tax Automation process to load and populate the provision schedules with the data from the trial balance (for example, Net Income Before Tax, and selected permanent and temporary differences).

When the Tax Automation process is complete, enter the remaining data using the prebuilt data forms, or through submissions from Oracle Smart View for Office. This data includes:

  • Tax rates
  • Non-automated amounts for pretax income adjustments or reclassifications
  • Non-automated amounts for permanent and temporary differences
  • Any additional provision items
  • Return to Accrual amounts
  • Manual activity in the Tax Account RollForward (for example, payments, refunds, reclassifications)
  • Any adjustments to automated amounts to remove differences that may exist within the trial balance (for example, travel expenses included in Meals and Entertainment)

After the automated and manual amounts are input, the system calculates:

  • Current Provision
  • Deferred Provision
  • Deferred Tax RollForward
  • Tax Account RollForward
  • Effective Tax Rate reconciliations in the reporting currency and local currency

The following forms and reports are available in the application:

  • Current Provision
  • Temporary Difference RollForward
  • Deferred Tax RollForward
  • Effective Tax Rate Reconciliation - Consolidated
  • Effective Tax Rate Reconciliation - Statutory
  • Tax Account RollForward
  • Tax Journal Entry (using Smart View and based on the Tax Account RollForward)
  • Tax Footnote (using Smart View and based on Current Provision and Deferred Tax RollForward