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 and IFRS) and local currency).

The following flowchart details the Tax Reporting tax process.

• Import trial balance data by legal entity into Tax Reporting
• Run Consolidation 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). This step ensures that the starting point of the current provision equals the legal entity’s financial statements pretax income.

• Input the remaining data using the pre-built data forms, or through submissions from Oracle Smart View for Office. This data includes:

  • National and Regional 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)
• System calculates the following results:
  • Current Provision
  • Deferred Provision
  • Deferred Tax RollForward
  • Statutory and Consolidated Effective Tax Rates in the reporting and local currencies
  • Tax Account RollForward
• Review the following forms in the Tax Provision National Cluster:
  • Current Provision
  • Temporary Difference
  • Deferred Tax
  • Consolidated ETR
  • National ETR
  • TAR
• Create the following entries and footnotes using Smart View
  • Tax Journal Entry (based on the Tax Account RollForward)
  • Tax Footnote (based on Current Provision and Deferred Tax RollForward)