Permanent Differences - Book/Tax Basis

Amortized permanent difference information is managed in the Amortized Permanent Differences screen under Data Input > Federal in the Provision and Estimated Payments datasets. There are two types of Permanent Differences: Equity Adjustments and P&L Adjustments. Select the appropriate type to achieve the desired provision effect.

 

Amortized Permanent Differences allow you to enter different book and tax amortizable basis and amortization periods. The resulting permanent difference between the basis is automatically computed. The remaining balance of the basis and periods rolls over to future datasets when the dataset is rolled over.

 

To import information to the Amortized Permanent Differences screen, complete the appropriate fields on the #UPDAM# Unit Perm Diff Amort sheet in the Import Numbers template. For more information on importing, refer to the Importing Templates documentation.

 

Note: If you wish to adjust the same amortized permanent difference more than once, you can make additional entries using different tag letters or class/subclass combinations.

 

Screen Entry Fields

Code - Name

The code and description are established by an Administrator for the permanent difference.

 

Sub-Type

•Type P results in a current tax provision expense offset in the payable account. The result does impact the overall effective tax rate.
•Type E results in a current tax provision expense offset in the payable account, as well as an equity contra expense that is offset in an equity account. This does not impact the overall effective tax rate.

 

Tag

The tag letter identifies each line entered in the originating source.

 

Class

The class identifies each line entered in the originating source.

 

Subclass

The subclass identifies each line description entered in the originating source. You can select Next Value as the subclass and the application generates the next "Code" number for the selected Code, Type and Class.

 

Months

The months entered for both book and tax are used to compute the ratable amount applicable to the period.

 

Beginning Balance

Rolls over from the prior period and should represent the remaining Permanent Differences for book and tax that should be allocated.

 

Deferred

To increase or decrease the balance. Amounts entered do not have any impact on the provision.

 

Enter Activity/Enter Ending

Select Enter Activity or the Enter Ending balance:

•Enter Activity - The system automatically calculates the Ending balance.
•Enter Ending - The system automatically calculates the Activity.

 

Activity

The appropriate amount of the activity based on the months entered. In a dataset that was not rolled over, you must populate this field.        

 

Ending Balance

The ending balance based on the months entered. In a dataset that was not rolled over, you must populate this field.