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This article applies to:

  • Product: ONESOURCE Corporate Tax

Interest reconciliation

Statement Purpose
This statement allows users to view the aggregated group total interest components from all entities within the group and to make any tax adjustments at the group level to the interest amounts recognized in the net accounting income or loss for the period.

Data Flow

The interest income per accounts is linked from the
Income statement
.
Totals from this statement are linked to the relevant components on the
Foreign sourced income
 statement.
The net of the withholding tax adjustments is totaled and linked to the
Withholding tax gross up
 section of the
Foreign sourced income
 statement, from where the amount is added to taxable/attributed income in the
Tax reconciliation income
 statement.

Explanation of Fields

Adjustments, where required, are to be input for:
  • Qualifying securities held by the trust for the purposes of Division 16E
     — interest required to be included in assessable income in respect of the securities is added to taxable income, whilst the interest brought to account for accounting purposes is deducted from taxable income.
  • Interest receivable at year end, unless the policy of the super fund is to recognize interest on an accrual basis.
  • Interest receivable
     — pre TOFA at year end, unless TOFA transitional balancing adjustment method is set to
    Yes
     on the
    Configuration
     statement.
  • Any group adjustments, which should be input in the
    group adjustment
     section.
  • Domestic interest
     — non-withholding tax, disclosed separately from other interest income for expenses allocation and distribution calculations in accordance with s128F of ITAA 1936.
Adjustments should be disclosed in the group adjustment column based on whether they impact the domestic, foreign, or domestic non-withholding tax income components.
After the first year, the opening adjustment amounts will roll forward from the prior year closing amounts via an import of prior period data.
When the
Calculation setup
 option for the TOFA
Hedging
 election is set to
Yes
, rows for
TOFA gains
 and
TOFA (losses)
 appear. These two rows link from the
Interest Income
 and
Domestic interest non-withholding tax
 in the Hedging statement.
When the
Calculation setup
 options
TOFA applicable
 or
Fair value (elective)
 are set to
Yes
, the following rows appear:
  • Interest receivable
     — pre TOFA opening balance
  • Interest receivable
     — pre TOFA closing balance
The interest withholding tax gross-up column is linked from the
Withholding tax - interest
 line in the Income statement.
Withholding tax relating to the opening balance of interest receivable should be entered as an addition to taxable income, whilst withholding tax relating to the closing balance of interest receivable should be deducted from taxable income.

Signage

  • Increases to the assessable interest amount are entered as positive amounts.
  • Decreases to the assessable interest amount are entered as negative amounts.
  • Opening balances to interest receivables/adjustments are entered as positive amounts.
  • Closing balances to interest receivables/adjustments are entered as negative amounts.