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Effective tax rate materiality report

FASB released ASU 2023-09 for U.S. GAAP filers, requiring public companies to disclose a clearer Rate Reconciliation (ETR) in financial statements for periods after December 15, 2024. The Effective Tax Rate CSC Breakout with Stacked CSC Details view provides an ETR that helps meet the new guidelines. Management can apply materiality thresholds to the ETR report for reporting and analysis with this new report.
You can access this report when you meet the following conditions:
  • Set the
    Add CSC Breakout Report
     option to
    Yes
     in the
    Administration
    ,
    System
    ,
    Manage Configurations
    ,
    Reporting
    , then
    Effective Tax Rate
     section;
  • Set the
    Report level
     to
    Sub-Consolidation
    ;
  • Select
    Rollup
     in the report options.

ETR rollup set

You need to create an ETR Rollup Set that includes Rollups conforming to the categories you are required to disclose. You don't need to create Rollups for the following system categories, as they’ll always appear:
  • FX Adjustment
  • State and Local Income Taxes
  • Effect of Rates Different than Statutory
  • Effect of Rate Changes in Current Year
  • True-ups
  • Unassigned

Materiality

There are 2 new Dataset Parameters you can add for the report to display your Rollups based on materiality:
You need to select the materiality in the report options before running the report.
The system applies the materiality threshold against the total of each Rollup in the Rollup Set.
The materiality threshold is not applied against the system categories FX Adjustment, State and Local Income Taxes, Effect of Rates Different than Statutory, Effect of Rate Changes in Current Year, True-ups, and Unassigned.

Items not material

The Stacked CSC report includes a section for Rollups that don’t meet the materiality threshold. The section shows the items with the Rollup Code in parentheses, followed by the adjustment code and amount.

Rate effect column

For the Stacked CSC view, the Rate Effect Column calculates based on the total PTBI of the CSC. This differs from the Effective Tax Rate CSC Breakout report, which calculates the Rate Effect based on the PTBI of each Sub-Consolidation separately.

This article applies to:

  • PRODUCT: ONESOURCE Tax Provision