Other workpapers

Borrowing costs workpaper

Use the Borrowing costs workpaper to analyse accounting borrowing costs and tax borrowing costs. On this workpaper, you can add back accounting amortisation, non-deductible borrowing costs expensed, and borrowing costs expensed but capitalised for tax. You can also claim the tax deduction for borrowing costs.
The workpaper is divided into three sections:
  1. Amounts treated as borrowing costs for accounting that have been expensed to P&L.
  2. Amounts treated as borrowing costs for accounting that have been capitalised to the balance sheet.
  3. Amounts treated as borrowing costs for tax.
All amounts treated as borrowing costs for accounting must be analysed in one or the other of the accounting values blocks.

Accounting values - Expensed to P&L

This block displays the various sources of accounting borrowing costs expensed to P&L throughout the calculation, so that they can be further analysed in one place. Amounts appear in the
Amount
 column D. These could be any of the following:
  • Expenses mapped directly to the Borrowing costs included in P&L line item on the Income Statement.
  • Expenses that were mapped or added to the Consulting Expenses, Legal Fees, or other similar Income Statement workpaper, but in that workpaper were allocated as borrowing costs. Those amounts are pushed from that workpaper to this section of the Borrowing Costs workpaper to be analysed further.
  • The total amounts expensed from each of these sources appears in column D,
    Amount
    . You can then manually allocate these amounts, or portions of them to the following:
    • Immediately deductible
       (column E). No tax adjustment is required as this is already expensed.
    • Never deductible
       (column F). Becomes tax add back – see row 41.
    • Capitalised subject to tax rules
       (column G). Becomes tax add back – see row 40.

Accounting values - Capitalised to balance sheet

This block displays the accounting borrowing costs that have been capitalised to the balance sheet. Any rows relating to amounts brought forward from the prior year appear automatically.
For current year additions, complete the
Original cost
,
Start date
 and
Write-off period (years)
fields, and the amortisation/deduction claimed (column L) and the closing balance (column O) are automatically calculated. You can enter the Closing balance per GL (column P) manually to then allow a variance check (column Q), but this is not required.
The
Amortisation/deduction claimed
 (column L), net of any
Adjustments/write-off
 (column M), and
Transfers in/(out)
 (column N), will result in a tax add back (see row 39).

Tax values

Use this block to add and analyse any amounts treated as borrowing costs for tax.
Any rows relating to opening balances brought forward from the prior year appear automatically.
For current year additions, complete the
Original cost
,
Start date
,
Opening balance
, and
Write-off period (years)
 fields. You can also select
Expensed to P&L
 or
Capitalised to balance sheet
(column C) to categorise the accounting treatment for each row. The amortisation/deduction claimed and closing balance are then calculated automatically.
You can also select expensed to P&L or Capitalised to balance sheet (col C) to categorise the accounting treatment for each row. The amortisation/deduction claimed and closing balance are calculated automatically.
Check the total current year Additions (cell G25) in this block. This amount should equal the total of P&L amounts Capitalised subject to tax rules (cell G9).
The amortisation/deduction claimed, net of adjustments and transfers, result in a tax deduction (row 44).
In the
Category
column, selecting a category for a row does not impact the calculation of values. but allows you to sort and view the rows in their respective categories.

Transition from Classic to NextGen content

Upon transition, complete these steps to ensure the Borrowing Costs workpaper brings forward opening balances correctly:
  1. In the RFB Borrowing costs workpaper, complete the
    Start date
     and
    End date
     fields for each amount brought forward. This is the roll-forward configuration sheet, not the standard BG Borrowing Costs workpaper.
  2. In the RFB Borrowing costs workpaper, complete the
    Start date
     and
    End date
     fields for each amount brought forward. This is the roll-forward configuration sheet, not the standard BG Borrowing Costs workpaper.
You only need to do this once, immediately after transition via rolling forward to a dataset using NextGen content. In other words, this is when you use the new Borrowing Costs workpaper for the first time.

This article applies to:

  • Product: ONESOURCE Trusts