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  • Product: ONESOURCE Corporate Tax

Life module — Iterative calculations and Populate

This section explains the use of the
Populate
 function and the purpose of the
Iterative calculations
 sheet.

Completing the sheets

Iterative calculations
The computation of taxable profits in a Life company has parts where calculations become circular:
  • The ability to take a deduction for policyholder tax in the calculation of basic life assurance and general annuity business (BLAGAB) trade profits.
  • The inclusion of BLAGAB trade losses relieved in the calculation of BLAGAB management expenses.
  • The ability to split an amount of foreign tax, taking a deduction against trade profits for some and obtaining credit relief for the remainder.
In all these, the circularity can result in a number of iterations of the tax computation being required until there's convergence on a final result.
The purpose of the
Iterative calculations
 sheet is to show the iterative process starting from the initial position and ending at convergence.
When a computation is first created, the sheet will be empty. Selecting
Populate
 (the lightning bolt symbol) will insert a column for each iteration. You can set the number of iterations at the end of the sheet. The default is 10.
The policyholder current tax is calculated using figures from the previous iteration, and the total shareholders’ profits after reliefs are re-calculated based on the new policyholder current tax.
If there's a change in any tax-sensitive data, then the error message
Run populate
 will appear at the end of the sheet. The error will also appear if the number of the iterations is not large enough for convergence. You can check whether this is the case by comparing the figures in the last 2 columns.
To avoid causing circular errors in the computation, the
Populate
 function takes the figures from the final iteration and enters them as values in the following cells instead of showing a formula:
  • BLAGAB trade losses relieved
    on the
    BLAGAB management expenses
     sheet.
  • Adjustment for policyholder tax
     and
    Foreign tax deducted
    on the
    Adjustment of profit BLAGAB
    sheet.
  • Foreign tax deducted
    on the
    Adjustment of profit Non-BLAGAB
    sheet.

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