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    Nicole Trimble
    Regional NOL workpapers create NBR on federal
    Topic posted July 16, 2019 by Nicole TrimbleGreen Ribbon: 100+ Points, tagged Deferred Tax 
    54 Views, 3 Comments
    Title:
    Regional NOL workpapers create NBR on federal
    Summary:
    Regional NOL workpapers create NBR on federal
    Content:

    We updated the new NOL workpapers for one entity in one state. The process we followed created an additional NBR that we were not expecting. See below for steps in process:

     

    NOL Workpapers:

    1. Breakout total NOL in prior year adjustment column by year

    2. Reverse current year utilization and allocate to proper year

    Regional Temporary Workpaper:

    1. Enter Opening Balance Adjustment for total BOY NOL (if we do not make this entry, the total BOY NOL is double counted via the original BOY carried over plus the breakout by year in the NOL workpapers) see second screen shot in the attachment.

     

    The opening balance adjustment creates a NBR on the federal deferred workpapers. I was expecting an NBR on both the Prior Year Adjustment and the Prior Year Adjustment Losses and Credits that would offset.

    Is there an error in our process?

     

    Version:
    19.06.82

    Comment

     

    • Julien Coudrette

      Hi Nicole,

      It doesn't look like a problem in your process. The NOL schedule feature is quite new and there may still be some issues.

      If you haven't created an SR for this, I recommend you do so.

      Best,

      Julien

    • Kenneth Kramer

      Hi, there are 2 parts to the issue.  The first issue is how to add the NOL/Credit detail and not impact the temporary differences.  In the comment above the NOL detail was added to the Prior Year column in the Tax Loss/Credit detail schedule and by doing so impacted temporary differences.  We recommend that you add the detail to the RTA column if you currently have the total in temporary differences.  The RTA column in Tax Loss/Credit detail does not carry to the temporary differences.

      The 2nd issue is the NBR in Deferred Tax (aka, Federal benefit of state) on data entered in the Prior Year column in the Tax Loss/Credit detail schedule once it is transferred to the temporary differences and tax effected.  We are looking at the NBR on this amount transferred to temporary differences-deferred tax as it does not appear to be calculating where configured as noted in the above comment.

       

    • Julien Coudrette

      Hi Nicole,

      I think Ken's suggestion to use the RTA column instead of prior year adjustment is relevant to bridge non-detailed to the detailed NOL. If you don't want to commingle this reclass with your real RTA, can you use another column that doesn't have this NBR problem?

      J