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Valuation Allowance Rates

You can use the Automation Policies policy,
Valuation Allowance Rates
, to post amounts automatically for deferred tax assets, based on a pre-determined percentage.
  • The system generates the valuation allowances and appears as a contra asset in reports.
  • The system determines the Automation on a
    Separate Attribute
    ,
    Aggregated Attribute
    , or
    Aggregated Attribute Post-Tax Basis
    . See the Valuation Allowance functionality table below.
To activate the
Valuation Allowance Rates
 for a unit:
  1. Select
    My Datasets > Units > More > Other > Automation > Enable Valuation Allowance Automation
    .
  2. Type the
    VA Rates
    .
Valuation Allowance functionality
Notes
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
.
  • 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.
Aggregated Attribute Basis
Use the
Aggregated Valuation Allowance
 functionality to combine the three component types and determine if a net asset will have an offsetting valuation allowance.
  • Activate the
    Aggregated Valuation Allowance
     functionality by importing the
    VA_CALCTYPE
     dataset parameter with a paramvalue of
    2
    .
  • In the Automation Policies page, you can enter percentages for the net amount of After Tax Temporary Differences, NOL Temporary Differences, and Temporary Differences in the
    VA Rate
     fields.
  • The functionality analyzes the net of the three component types. For example, if balances in Net Operating Losses for the unit netted to an asset and the Temporary Differences for the same unit netted to a liability, when the NOL and the Temporary Differences are netted to an asset, the system posts a valuation allowance contra asset at the entered percentage for Aggregated Base Valuation Allowance.
  • The Current/Non-Current balances that made 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.
Aggregated Attribute Post-Tax Basis
Use the
Aggregated Post-Tax Valuation Allowance
 functionality to combine the three component types and determine if a net asset will have an offsetting valuation allowance.
  • Activate the Aggregated Valuation Allowance functionality by importing the
    VA_CALCTYPE
     dataset parameter with a paramvalue of
    4
    .
  • In the Automation Policies page, you can enter percentages for the net amount of After Tax Temporary Differences, NOL Temporary Differences, and Temporary Differences in the Unified VA Rate.
  • The functionality analyzes the net of the three component types. For example, if balances in Net Operating Losses for the unit netted to an asset and the Temporary Differences for the same unit netted to a liability, when the NOL and the Temporary Differences are netted to an asset, the system posts a valuation allowance contra asset at the entered percentage for Aggregated Base Valuation Allowance.
  • The Current/Non-Current balances that made 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.
  • This method identifies where a unit or filing group has a Net Deferred Tax Asset and posts on After-Tax Basis to the codes VA_SYS_ATTD_C and VA_SYS_ATTD_NC.
Converting from Aggregated to Aggregated Post-Tax
Converting from the
Aggregated Attribute
 to
Aggregated Attribute Post-Tax Basis
:
  1. Change the paramvalue for the
    VA_CALCTYPE
     dataset parameter from
    2 to 4
    .
  2. Export your data to create an Import Template. You can also save this file to create a back up of your data prior to changing it.
  3. In
    Reporting
    , select a report and then
    Run
    . The program computes the automation amounts for Valuation Allowances on an Aggregated Attribute Post-Tax method and then generates an updated report.
  4. You can re-import your Beginning Balances for Valuation Allowances, if necessary.

This article applies to:

  • PRODUCT: ONESOURCE Tax Provision