When it comes to doing the complicated corporate tax provision, we have discovered in our surveys many corporate tax professionals are still using an in-house, homemade excel format. The problem is an in-house excel program will miss important information and calculations. What we learn from experts is the disproportionate amount of time tax professionals are spending on making sure the Excel spreadsheets are calculating correctly versus the real technical issues in an ASC 740 context.
For most companies, the facts change from year to year. For example, changes occur to accommodate new facts such as new entities, states or foreign jurisdictions, uncertain tax benefits or even new perms and temps. These changes require significant knowledge of the design and links within the excel spreadsheet model. Spreadsheet users are often required to make modifications to multiple tabs in the spreadsheet and ensure that they don’t break any formulas. This whole process introduces risk into the spreadsheet. For example, something that should be very simple like adding a new entity will require numerous changes to a spreadsheet model.