A Net Operating Loss (NOL) occurs when your deductions are more than your income for the year. An NOL can be carried forward to future years to offset income, thus reducing your tax liability. Because NOLs are tracked separately within jurisdictions, the National NOL does not flow down to local calculation. S_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 Local NOL:
| 1. | Select the appropriate code-description from the drop-down menu in the first column. |
| 2. | Indicate whether the item is classified as current or non-current. |
| 3. | The carryover balance, if any, is automatically pre-populated. |
| 4. | Enter the current activity amount in local currency. |
| 5. | There are fields for entering deferred adjustments and balance sheet only adjustments. Note: Refer to the Where to Enter Items in ONESOURCE Tax Provision section for more information on the different types of adjustments (i.e., current activity, deferred only, and balance sheet only). |
| 6. | Click Add New to create the NOL. |
Note: If a new local NOL item is required, contact the Corporate Tax Department.
After a NOL item is created, you can edit or delete the item 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 an 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 Local Tax Provision report and the Local Tax Provision report.
Global Access users 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. However, even with this parameter, Global Access users still have the option to take either approach by deferred item.
