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Asset Sourcing Workpaper for Foreign Entities for Tax Years 2011 and Later
Enter balance sheet information and it is adjusted in the Tax Accounting System (TAS) to populate balance sheet schedules on various federal and international tax forms. In the international calculations, asset information by source code is also needed when apportioning a foreign entity’s interest expense under the
asset method
. The Asset Sourcing Workpaper serves as a bridge between TAS after-tax asset balances (in total) and asset ending balances (by source code) needed on the Foreign Entity | Interest Apportionment Information – Operating Assets - Taxable
screen.The
Asset Sourcing Workpaper
is available for tax year 2011 (and later) income tax binders with an international filing type of Foreign Entity.International Summary Chart of Accounts and Binder Properties
To use this feature, you must have international asset account(s) in the International Summary Chart of Accounts. The International Summary Chart of Accounts is located in the home window under
Charts | International >International Summary Accounts
. When you create an international account, you must assign an international account type. The international account types listed below are available for assets and are displayed in a foreign entity’s Asset Sourcing Workpaper
:- 8251 (Inventory)
- 8252 (Inventory Reserve)
- 8260 (Ending Inventory)
- 8350 (Current Assets Other than Inventory)
- 8850 (Other Assets)
- 8900 (Total Assets)
During TAS compute/consolidation, functional currency after-tax amounts are transferred to the
Original Trial Balance Amount
column of the Asset Sourcing Workpaper based on the federal to international chart cross-referencing under Charts > International > International Xref
. At least one federal account must be cross-referenced to an international asset account to trigger the transfer of source code amounts from the Asset Sourcing Workpaper to the Foreign Entity > Interest Apportionment Information – Operating Assets - Taxable
screen .Binder Properties
To use the asset method of interest apportionment for the international calculations, you must select the option in the
Binder Properties
screen. (International
tab | Interest Apportionment
area, select Assets
from the dropdown.)
Asset Sourcing Workpaper (Transfer Source)
During TAS compute/consolidation, functional currency amounts are transferred to the
Original Trial Balance Amount
column of the Asset Sourcing Workpaper.- TheOriginal Trial Balance Amountcolumn is shaded grey because it is protected from data entry and import.
- TheTrial Balance Amount or Overridecolumn is used to override the amount transferred from TAS.
- Trial balance amounts are specifically allocated (by formula or amount) to the desired source codes columns.
- Enter formulas within square brackets ([]) as either a percentage of the trial balance amount ([XXX.XX%]) or as the remaining unallocated balance ([BAL]).
- Formula amounts display as blue and numerical amounts are black.
- TheAmount to be Allocatedcolumn can be positive or negative and is calculated as the trial balance amount less the sum of all allocated amounts (formula and amount). Unlike the Income Sourcing Workpaper, the trial balance amount does not need to be fully allocated. However, if at least one account is not fully allocated or is over-allocated, the system will create an E&P comprehensive edit warning message but this will not stop the international calculations.
- There are two total rows at the bottom of the workpaper:
- Total Taxable Assetsis a total of each column in the workpaper.
- The second row,Total to Interest Apportionment Information | Operating Assets – Taxable | Ending, is a sum of the specifically amounts for accounts with a non-zero trial balance amount. Each time you save changes to the Asset Sourcing Workpaper, the system transfers theTotal to Interest Apportionment Information > Operating Assets – Taxable | Endingamount for each source code to the newEnd of Year Taxable (From International Transfer)column on the Interest Apportionment Information – Operating Assets – Taxable screen.
note
Importing sourcing information automatically triggers the transfer of the Total to Interest Apportionment Information | Operating Assets – Taxable | Ending balances.
Interest Apportionment Information (Transfer Destination)
Non-Consolidated Entity and Divisional Consolidation Entity (Divisional Consolidation Sourcing)
- TheEnd of Year Taxable (From International Transfer)column is protected from data entry and import. This column is automatically updated from the source code totals on the Asset Sourcing Workpaper each time you save the changes to the workpaper.
- Amounts entered in theEnd of Year Taxable (Override)column take precedence (in the international calculations) over the transferred amount.
Divisional Consolidation Entity (Division Sourcing)
Do not use the
End of Year Taxable (From International Transfer)
column when a divisional consolidation sources at the division level. In the division sourcing scenario, the End of Year Taxable (Override or Consolidated Amount)
column consolidates either the End of Year Taxable (Override) or the End of Year Taxable (From International Transfer) from each member binder. In the member binders, the Endof Year Taxable (Override) takes precedence over the End of Year Taxable (From International Transfer) during TAS consolidation.Rollover of End of Year Taxable Amount (from International Transfer) or (Override)
On binder rollover, the
End of Year Taxable (From International Transfer)
or End of Year Taxable (Override)
amount for each source code becomes the Beg of Year Taxable
amount in the subsequent year. If both end of year taxable amounts are present for a source code, the End of Year Taxable (Override)
amount moves to the Beg of Year Taxable
column.Interest Expense Apportionment Base 406
Amounts from the
Interest Apportionment Information > Operating Assets – Taxable
and Basis in Subsidiary
workpapers are used to build the interest expense apportionment base code 406 numerator for each source code during international calculations as follows:Operating Assets - Taxable Amount
(Beg of Year Taxable + End of Year Taxable (From Override* or International Transfer))/2
* Override amount takes precedence over amount From International Transfer.
+
Basis in Subsidiary Amount
(Beg of Year Investment + End of Year Investment)/2 + Pre-87 E&P + Post-86 E&P