Separate Attribute Basis

By default, the system uses the separate basis valuation allowance to calculate the valuation allowance. In the Automation Policies page, you can enter rates to calculate the valuation allowance for
After Tax Temp Diff
,
NOL Temp Diff
, and
Temp Diff
. See Valuation Allowance Rates.
  • The functionality analyzes each of the three component types separately. For example, if balances in Net Operating Losses for the unit netted to an asset, the system posts a valuation allowance contra asset at the entered percentage for Net Operating Losses. However, if balances for the Temporary Differences for the same unit netted to a liability, the system will not post a valuation allowance.
  • Current/Non-Current balances that make up the component's asset determine the designation of current or non-current status for the valuation allowance.
  • For units in a Filing Group, the parent unit determines the valuation allowance automation and percentage for the group.