Taxes are complex. Accounting for income taxes, the ASC 740, is difficult. But with Tax Prodigy, the process becomes easy, comprehensive, and accurate. If you have the tools to help you, why would you choose to ignore them?
Tax Prodigy Provision dramatically reduces the risk in your ASC 470 process by truly complying with technical requirements under GAAP. In practice, few companies are calculating the balance sheet accounts (deferreds, payables, and UTBs) that are associated with all the returns they file. Most companies use a modified FIN 18/P&L approach to manage a least some part of their income tax provision process. That approach introduces risk. Coupled with increased scrutiny around controls, it is a very challenging time to manage the ASC 740 process.
Corporate Tax Profile
Tax Prodigy Provision’s unique approach to organizing your legal entity structure, jurisdictions, and related income returns allows you to input each relevant fact once for use across the application. It is now just as easy to create a precise state rate calculation based on historical or projected apportionment as it ever was to “s.w.a.g.” a blended rate.
As you set up each non-U.S. jurisdiction you also enter the local country tax rates and each of the required currency exchange rates to enable automated currency translation including the always challenging “currency translation adjustment”. Finally, as the next period comes around, roll the corporate structure straight into the next provision cycle so you can focus on the things that matter instead of triple checking that the spreadsheet model didn’t break in the process.
Current Tax Calculation
ASC 740 mandates a balance sheet approach. Tax Prodigy Provision delivers it. But the way we get there is revolutionary. Tax Prodigy Provision works the way you already work. Now you can put your information into an application purpose-built for tax provision professionals and designed to flow with your normal process. Once the information is in Tax Prodigy Provision, whether it is actual financial results or estimates, you only put each item in once and it available throughout the application and in each part of process. If late changes to the financials show up, simply drop in the new numbers in where it belongs.
You’ll never have a mismatch between your deferred roll forward and the current payable calculation again.
Tax Prodigy Provision’s deferred rollforward allows you to easily navigate between entities and returns on either a gross or tax effected basis. Track your NOLs and credits by entity jurisdiction and year while letting Tax Prodigy Provision’s sophisticated logic calculate utilization of prior year attributes and the generation of new carryforwards.
Uncertain Tax Benefits
Tax Prodigy Provision‘s unique UTB rollforward is organized around the footnote disclosure requirements which saves time and drives efficiencies.
The UTB rollforward leverages off of the (corporate structure data) to automate the UTB related deferred consequences that are often cumbersome to calculate and maintain in spreadsheets.
The tax payable tieout won’t be an afterthought anymore.
With a single, integrated solution driving the entire tax provision, current year payable amounts and payments flow automatically into the tax payable roll forward.
Ensure that the income tax payables are reconciled for every return. Understand the components of tax, interest, penalties and payments that make up each payable or receivable you accrue.
After all the work required to calculate an accurate provision, why is it so hard to get the journal entries and footnote presentation done? Those struggles are a thing of the past when you implement Tax Prodigy Provision. All the details needed to close out your provision process are at your fingertips. The required footnote disclosures are calculated for you. Now you can spend time editing the verbiage instead of tinkering with numbers.
The PCAOB is, once again, stepping up their scrutiny of your auditors! What’s the issue? Evidence of review! Tax Prodigy Provision provides both cell-level workpaper referencing as well as comment and response functionality that identifies the author of each comment, each response and provides a date and time stamp of the entire process. Your auditors will breathe easier knowing their documentation has been completed for them in the natural course of the audit.
One of the greatest weaknesses in many companys’ current provision process is a lack of security and accountability controls. If the company uses a spreadsheet there is no way of knowing whether a value was changed after the provision was reviewed, or who changed it.
PCAOB now requires that reviewers prove that they have reviewed the provision in detail. All values require (& have) traceability back to the workpapers. All workpaper values support preparer’s notes. The provision can be reviewed and approved in stages. Once approved, any changes require extra effort and are immediately obvious. Tax Prodigy Provision supports an intuitive commenting and review
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