Multi-GAAP: Usecase Example 2

Using Deferred Tax Override Rates Temporary Differences

  • Setup deferred tax override rates to override rates by Multi-GAAP.
  • Navigate to Library → Administration and open Deferred Tax Override Rates by Multi-GAAP form. For example, in the screenshot below, Fixed Assets - Book Depreciation Temporary difference account has Current Year rate and Closing rates overridden.

    Deferred Tax Override Rates by Multi-GAAP form

    Note:

    • If Override Tax Rate Closing value is not provided in Deferred Tax Override Rates by Multi-GAAP, then the Closing Tax Rate from Tax Rates by Multi-GAAP form is used to calculate the rate change.
    • It is not mandatory to specify override tax rates for every GAAP member.
  • Verify the Overridden Tax rates for the Temporary difference account. The Temporary Differences Closing Balance is 17,000 and Other Adjustments Total (Deferred Only) on Pre-Tax is 10,000.

    Temporary Differences

  • Open the Deferred Tax form to verify the tax effected data using override rates for Fixed Assets - Book Depreciation account.

    Deferred Tax form

    In the above example screenshot, you see that:

    • The Current Year Rate change is calculated based on the difference between Override Tax Rate Current Year (25%) and Override Tax Rate Closing (30%). For example, Other Adjustments Total (Deferred Only) on Pre-Tax 10,000 and using the Override Current Year Tax Rate that is, 25% = 2,500
    • The Current Year Rate change is calculated using the difference between Override Tax Rate Current Year that is, 25% and Override Tax Rate Closing that is, 30% (Pre-Tax CY is 17,000 * (30 % - 25%) = 850)