Actual Net Operating Losses (NOLs)

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A Net Operating Loss (NOL) occurs when you have a loss before tax book loss or your deductions are more than your income for the year. An NOL can be carried forward to future years to offset income, and thus reduce your tax liability. Enter the NOL for the unit selected in local currency. NOL_SYS automatically generates an NOL when taxable income is negative; it also automatically uses NOLs when income is present.

Administrators can enable NOL automation in Corporate Edition in the Provision tab by clicking Data Review > Federal > Unit Details > Automation and selecting the Enable NOL Automation check box.

Enter a separate line item for each Net Operating Loss:

1.Select the appropriate code-description from the drop-down menu in the first column.

 

2.Indicate whether the NOL item is classified as current or non-current.
3.Select the tag.

 

4.The carryover balance, if any, is automatically pre-populated.
5.Enter the current activity amount in local currency.
6.There are also fields for entering deferred only adjustments and balance sheet only adjustments.
Note: Refer to the Where to Enter Items in ONESOURCE Tax Provision section if you need more information on the different types of adjustments (i.e., current activity, deferred only, and balance sheet only).
7.The ending balance, if any, is automatically calculated.

 

8.Enter the year in which the NOL item was generated and the year in which it expires.
9.Click Add New to create the temporary difference.

Note: If a new NOL item is required, contact the Corporate Tax Department.

After a temporary difference item is created, you can edit or delete it by clicking the appropriate icon. Click the pencil icon to edit the entry. Select Save Changes after making any changes. You can attach files to individual temporary difference items on this page. If you have supporting documents, click the paper clip icon next to the item.

The impact of individual temporary differences on your tax provision can be viewed on the Interim Provision report and the Effective Rate report.

You can enter information in the current activity, deferred only, and balance sheet only fields using the income statement approach. Or you can input an ending balance amount and have the system calculate the current activity using the balance sheet approach. Administrators can enable the balance sheet approach through a parameter. However, even with this parameter, Global Access users still have the option to take either approach for each line item.