1. Working with Tax Reporting
  2. Working with National Tax Process
  3. Working with National FX Rates
  4. Calculating the Weighted Average FX Rate Override for NIBT Accounts

Calculating the Weighted Average FX Rate Override for NIBT Accounts

This option enables you to calculate the Weighted Average FX rate specifically for NIBT accounts. You enter NIBT translated amounts against Input Currencies, and the Weighted Average FX Rates are calculated. The Weighted Average rate calculated for NIBT can only be applied to the TRCS_NIBT Tax Account. You can override the calculated Weighted Average FX.

NIBT FX rates can only be entered in the Consol cube. The NIBT FX Override rate must be configured, otherwise, the NIBT WAR will not be applied. The difference between the NIBT override rate and the average rate * NIBT is classified as a permanent difference for the current provision, and the consolidated and statutory effective tax rate reconciliations.

To calculate the Weighted Average FX Rate for NIBT Accounts only:

  1. From the Home page, click the Navigator icon Navigator icon, under Create and Manage, select Dimensions.
  2. On the Dimensions tab, select the Account dimension, and then expand TRCS_TaxAccounts to select the member TRCS_NIBT.
    Select TRCS_NIBT member
  3. On the Actions toolbar, click Edit Edit to open the Edit Member screen, and then click Attribute Values.
  4. On the Attribute Values tab, select the following attributes, and click Add, and then Save:
    • NIBT FX Override Account
    • NIBT FX Override Difference Account

      Note:

      No data in the Entity currency must be in the Difference account because it is used to calculate the difference in the translated amounts.
  5. From the Home page, select Library, then Forms, then Tax Administration, and then the TRCS_NIBT FX Rates Override - WAR form.
  6. On the TRCS_NIBT FX Rates Override - WAR form, select the POV. Under NIBT, the Entity Currency is coming from the NIBT Source on the Current Provision report after consolidation.

    Note:

    The amount displayed for the Entity Currency is also displayed under the respective Currency selected in the POV. For example, if the Entity is in Montreal using CAD currency, the same amount is displayed for CAD, and the calculated Weighted Average FX Rate is shown as 1. Other entered currencies show the calculated Weighted Average FX Rate for that currency.
  7. Optional: Load the translated amounts into the respective currencies, such as USD or EUR.
    TRCS_NIBT_ FX Rates Override - WAR form
  8. Under the NIBT Weighted Average FX Rated Calculated column, the derived rates are displayed for each currency. The calculated rate is applied only to the NIBT account.
  9. From the Home page, select Tax Provision National, then Package, and then select the Current Provision tab and run Consolidation for the report.
  10. Set the POV to the Entity Currency.
  11. In the Total column on the Current Provision report, the translated values are displayed. Note that under the Net Income Before Tax accounts, there is no data in the Perm 3 - XXXXX account. In the POV, you can set the currency to the respective currency to see the translated values.
    Current Provision Report with translated values

Note:

To apply the same NIBT Weighted Average Rate for the book Account(s), so that on translation both NIBT and book Account(s) have same value, follow the steps below:
  1. Navigate to Dimension library (see, Working with Dimensions in Administering Tax Reporting) and select the parent Account which is sourced for NIBT tax automation.
  2. Click on Edit and select the Custom Atrribute tab.
  3. Setup custom attribute ApplyWARRate->ApplyNIBTWARRate.
  4. Click Save and refresh the database.

Note that, if the attribute is setup at parent Account then all children under it will use the NIBT weighted average rate. Alternatively, you can also specify the attributes at the relevant base Account(s).