Working with the Statutory and Consolidated Effective Tax Rate

Tax Reporting calculates the Effective Tax Rate (ETR) reconciliation automatically at the national (statutory) and consolidated rates.

The statutory and consolidated rate reconciliation forms capture the following items on a pretax and tax-effected basis:

Net Income Before Tax
Permanent Differences (GAAP to Stat)
Permanent Differences (Stat to Tax)
Total Permanent Differences
Total Deductible Tax CETR
Special Deductions
Total Tax Credits Current Year
Change in Valuation Allowance
Foreign Tax Rate Differences
Additional Current Provision - Source
Additional Current Provision - Manual
Additional Total Provision - From Current
Return to Accrual Adjustment
Audit Settlement Adjustment
Other Adjustments (Deferred Only)
Transfers (Deferred Only)
Prior Year Adjustment (Deferred Only)
Contingency (Deferred Only)
Rate Change - Total
Deferred Tax Override Rate Adjustment
DTNR Current Year P&L
DTNR Current Year Total P&L
Deferred Tax Expense Total

Consolidated ETR screen shows the Pre-Tax, and Tax Effect, and the Condolidated ETR Percentage

The consolidated rate reconciliation starts with the global statutory tax rate to reconcile to an entity’s tax rate using the categories noted above. The statutory rate reconciliation calculation is similar to the consolidated rate reconciliation, but the starting point is based on the entity’s statutory tax rate and, therefore, there is no foreign rate difference.

The rate reconciliation automatically calculates the tax impact of reconciling items as a percentage of pretax net income before taxes as adjusted. The system provides the ability to drill down to the lowest level of detail of each of the above reconciling items to view the contribution of each item to the overall effective tax rate, depending on the level of information that is entered.

The foreign rate difference is calculated by taking the difference between the consolidated tax rate and the statutory tax rate and multiplying it times Net Income Before Tax Adjusted, GAAP to Stat permanent differences and Stat to Tax permanent differences.