Best practice: Your ‘accounting’ versus ‘tax’ balance sheets side-by-side
Determining the tax bases of assets, liabilities and equity accounts natively generates ‘temporary differences’ between the accounting and tax balance sheet and the deferred tax position for recognition in financial statements. These differences arise due to the inherent differences between accounting rules and tax regulations. A platform with the capability to produce a full tax balance sheet allows for more accurate and better auditability of current taxes, deferred taxes, and tax in equity.
CCH Integrator’s underlying tax accounting engine is purpose built to automatically calculate and reconcile deferred tax. Not only does the CCH Integrator tax accounting engine produce a tax balance sheet, the platform goes a step further by displaying the tax balance sheet side-by-side with the accounting balance sheet, allowing for easy comparison of accounting and tax bases. This provides users a clear and immediate view over their tax and accounting balances, temporary differences, and resulting temporary tax and journal adjustments.
CCH Integrator also provides the 350 corporations that use the platform, including 40% of the ASX 100, powerful out of the box visibility of the detailed calculations supporting the tax balances and reconciliations proving the tax positions. It also automatically calculates and consolidates the impact of other factors that influence the tax balance sheet and deferred tax position, such as currency conversion, changes in tax rates, managing unrecognised deferred tax assets, and the impact of prior year book-to-return adjustments.
CCH Integrator’s tax accounting engine and reporting functionality provide many advantages, including:
- streamlined internal review and outputs that provide transparency to auditors, financial advisors and tax authorities regarding the end-to-end data transformation process.
- robust controls over data accuracy, leading to a reduced risk of restatement whilst also enabling more timely reporting.
- centralised tax data management that allows you to tap into the deep business data captured in the tax provisioning and compliance processes to provide business intelligence and analytics.
How to identify the tax technology platform that’s right for your organisation
To help you with this decision, we’ve come up with five key questions to ask about tax technology before investing in a new solution. Once equipped with this knowledge, you and your team can get ready to take advantage of a solution that promises efficiency, increased auditability, and allows for greater collaboration and control.
In this guide, you will learn the importance of a tax software solution that:
- Fully integrates the tax provision and tax return.
- Produces a full tax balance sheet.
- Automatically produces your tax provision.
- Configures easily to meet your organisation’s changing needs.
- Provides timely, effective customer support after implementation.