Deferred taxes calculation

Introduction

CCH Tagetik natively supports the calculation of deferred taxes both on amounts and on journals. The impact of deferred taxes must be stated when there are temporary differences between the values of the asset and the liability and the values for tax purposes resulting from the annual financial statements of consolidated entities. These different can be generated individually for each consolidated entity, including through consolidation journals.

The differences are made up of revenues and costs that contribute to forming the taxable income in a tax period other than the one in which they contribute to forming the statutory result. For consolidation journals, one such example is the intragroup profit elimination journals: if, against intragroup profits, taxes have been set aside in the financial statements of the entity that booked them, said taxes will be deferred to the realisation of the operations with minorities outside of the group.

Once the tax rules have been defined, they are used as the default rules for every process unless they are overridden for the individual process.

Elements of the deferred taxes calculation

The element with which income taxes and the relative rates are defined is the fiscal policy. Through the fiscal policy, the rates used to calculate the following taxes are associated with an entity:

• direct taxes in Cash Flow Planning
• deferred taxes in consolidation data processing.