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Calculating the Interim Provision for the Quarter
| • | Populate the Actual section with the Actual Pre-Tax Book Income that was generated for the quarter. |
| • | Statutory Tax Rates in effect during the quarter should be populated for each unit. For state, be sure to include the expected apportionment factors for states/jurisdictions. |
| • | Extraordinary and Discrete Items that arose during the quarter should be populated in the appropriate area. |
| • | True-up (if necessary) for the impact of a change in the forecasted annual effective tax rate on prior quarters' Pre-Tax Book Income. |
| • | Activity should be reflected in either the Payable or the APIC Pool balances for the quarter. |
| • | You can populate the dataset either by entering amounts directly in the system or by using the Import Numbers template. |
Interim Provision / Interim Effective Tax Rate
| • | The interim effective tax rate can be calculated two ways: (0) Using total pre-tax book income that does not include the pre-tax book income of Exclude Foreign Loss and Exclude Unit units or (1) using pre-tax book income that includes the pre-tax book income of all units, regardless of whether it is an Exclude Foreign Loss or Exclude Unit unit. |
| • | The designation is made with a USE_WWPTBI_INTPROVETR dataset parameter with a parameter value of 0 or 1. |
| • | Although the tax effect of pre-tax book income at forecast rates of Exclude Foreign Loss and Exclude Unit units may not be included, the tax effect of its discrete items are included in the interim provision. |
Applying the Annualized Forecasted Effective Tax Rate vs Unit Rates
| • | The Annualized Forecasted Effective Tax Rate is used to compute the current tax on the Pre-Tax Book Income based on either a unit-by-unit basis or on an overall basis, depending on the dataset's designation. |
| • | Unit Rates are used to compute the current, deferred taxes and equity impact on the Extraordinary and Discrete Items for the quarter. |
Reviewing the Interim Provision Results
| • | The Interim Provision report displays the Current, Deferred, and Equity provision calculations. The Forecast rate is applied to the Pre-Tax Book Income and is then added to the Extraordinary/Discrete items at the unit rates to arrive at the provision for the quarter. There is also a state level Interim Provision report. |
| • | The Effective Tax Rate Reconciliation report displays the components of the interim provision. The report is similar to the report in the Provision dataset with the exception of an additional line that reconciles the Forecast vs Actual rate impact on Pre-Tax Book Income. |
| • | The Deferred Balances, Temporary Difference Summary, Foreign/Domestic Summary, Payable, and Journal Entry reports are identical to the reports in the Provision dataset. They display the data for the interim period. |
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