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Working With ETR Disclosure Accounts

You can use the Manage ETR Disclosure Accounts app to build the hierarchy used for the ASC 740 ETR disclosure. The purpose of this hierarchy is to organize the existing Consolidated ETR into the structure required for disclosure.

The ETR disclosure hierarchy is contained under the ETR root and contains the following standard disclosure categories:

  • ETR_Category_01 - U.S. Federal Statutory Tax Rate
  • ETR_Category_02 - State and Local Income Taxes, Net of Federal Income Tax Effect
  • ETR_Category_03 - Foreign Rate Difference
  • ETR_Category_04 - Effect of Changes in Tax Laws or Rates Enacted in the Current Period
  • ETR_Category_05 - Effect of Cross-Border Tax Laws
  • ETR_Category_06 - Tax Credits
  • ETR_Category_07 - Changes in Valuation Allowances
  • ETR_Category_08 - Nontaxable or Nondeductible Items
  • ETR_Category_09 - Changes in Unrecognized Tax Benefits
  • ETR_Category_10 - Other Adjustments

The following restrictions apply when working with the ETR hierarchy:

  • You can add new symbols to the ETR Disclosure hierarchy.
  • You can assign any accounts from the Consolidated ETR hierarchy to a existing category or any symbol you have added to the ETR Disclosure hierarchy.
  • You can remove symbols assigned from the Consolidated ETR hierarchy.
  • You cannot remove a symbol that was added to the ETR Disclosure hierarchy.
  • You cannot remove a symbol from the ETR Disclosure hierarchy if its parent is also assigned to the ETR Disclosure hierarchy.
  • You cannot add new symbols as children of any symbol assigned from the Consolidated ETR hierarchy.
  • You cannot change the parent of any symbol assigned from the Consolidated ETR hierarchy if its parent is also assigned to the ETR Disclosure hierarchy.

These restrictions exist to prevent you from inadvertently changing the Consolidated ETR reporting hierarchy.

Importing ETR disclosure accounts

The import option in the Manage ETR Disclosure Accounts dialog allows you to create and update disclosure accounts, including the assignment of accounts from the national consolidated ETR hierarchy, in the database from a .csv file.

To import accounts:

  1. For Option, select Import.
  2. Select the .csv file to import from.
  3. To skip confirmation of each new parent assignment, check the Automatically confirm parent assignment option.
  4. Select the root hierarchy that will be updated. Accounts in an import file must be assigned to a parent within ETR hierarchy.
  5. Click OK.
  6. A table will be displayed showing the summary of all actions performed by the import.

Note: If there are any issues with the file, a table will be displayed indicating the issues. No changes will be made to the discrete items’ hierarchy.

.csv file example

Name,Description,Parent,Sort Order

"TaxCrT","Total Tax Credits - Permanent","ETR_Category_06",100.000000000

"MSP_TotRegTotTaxConsol"," ETR_Category_02",100.000000000

"ETRRDCrT","R&D Tax Credits"," ETR_Category_06",110.000000000

where:

  • Name is the name of the disclosure account symbol.
  • Description is the description of the disclosure account.
  • Parent is the name of a parent account to assign the account to. The account will become a child of the specified parent, and the values in the parent will be calculated from all its children.
  • Sort Order indicates the order of the account under the parent, with lower numbers ordered before higher numbers. You can specify NULL or 0, which will assign the sort order as 0, which results in the symbol being sorted by when it was created.

Managing disclosure accounts

The Manage option in the Manage ETR Disclosure Accounts dialog allows you to create, and update accounts from within the Manage ETR Disclosure Accounts table.

To manage accounts:

  1. For Option, select Manage.
  2. The only option for the ACCOUNTS selection is ETR, which is the root of the hierarchy.
  3. In the Manage ETR Disclosure Accounts table the list of accounts selected is displayed.

Working with the hierarchy

The selected account and all its descendants are displayed in a hierarchical view. The view is initially expanded two levels below the selected account.

To change the level of expansion:

  1. Click a collapsed hierarchy icon to expand the hierarchy one level below the selected symbol.
  2. Click an expanded hierarchy icon to collapse the hierarchy to the selected symbol.
  3. Right-click on the top row and select one of these options:
    • Expand All for Selected Row - to expand the entire hierarchy below the selected symbol.
    • Collapse All - to collapse the entire hierarchy.
  4. Right-click on a parent row and select one of these options:
    • Expand All for Selected Row - to expand the entire hierarchy below the selected symbol.
    • Collapse All - to collapse the entire hierarchy.
    • Collapse Parent - to collapse the hierarchy to the parent of the selected symbol.
  5. Right-click on a leaf row and select one of these options:
    • Collapse All - to collapse the entire hierarchy.
    • Collapse Parent - to collapse the hierarchy to the parent of the selected symbol.

Adding a disclosure account

You can add additional accounts to organize breakdowns within a category or to create a new category.

To add a new account:

  1. Select a row in the table. The new account will be assigned as a child of the selected account.

    Note: You can add a new account that has similar settings to an existing account by selecting a row and clicking duplicate.

  2. Click Add. The Add dialog appears.
  3. Fill in the following fields:
    1. Name: Enter the name of the account. The name of the account is limited to 31 characters.
    2. Description: Enter a description for the account. The description of the account is limited to 100 characters.
    3. Parent: Select or enter the name of the parent to assign the account to.

      Note: You can also click the search button to open the symbol selector dialog to access advanced search options.

    4. Sort Order: Enter a number to define the order of the account under the parent. Accounts are sorted from low to high. Accounts added with a sort order of 0 will appear last, in the order the account was created.
  4. Click OK to add the new symbol to the table.

Accounts are not added to the database until you click Apply.

Modifying an account

You can change the properties of an existing account:

  1. Modify the description by editing the value in the Description cell.
  2. Change the order the account appears under its parent by modifying the sort order value.
  3. To change the parent of an account:
    1. Select the row in the table
    2. Click Edit. The Edit dialog appears.
    3. Enter or select a new parent.
    4. Click OK.

No changes are made to the database until you click Apply.

Note: You cannot modify the parent of an account if its parent is an account from the national consolidated ETR hierarchy. When you apply the changes, this will be reported as an error.

Assigning an account from the national consolidated ETR hierarchy

You can assign an account from the national consolidated ETR hierarchy to include it in a disclosure category.

To assign an account:

  1. Right-click on the row selector of the symbol you wish to assign the account to.
  2. Select the account to assign.

    Note: The selected account cannot be already assigned to the disclosure hierarchy via it’s parent being assigned already, nor can it be assigned if any of its descendants are already assigned to the disclosure hierarchy.

  3. Enter a number to define the order of the account under the parent. Accounts are sorted from low to high.
  4. Click OK.

Removing an account from the disclosure hierarchy

You can remove an account that was assigned from the national consolidated ETR hierarchy to remove it from the disclosure hierarchy.

To remove an account:

  1. Right-click on the row selector of the symbol you wish to remove.
  2. The account will be flagged as to be removed.
  3. If you wish to undo the removal of the account, click on the checkbox in the Removed from Parent column to de-select it.

Applying changes

To apply changes to the trial balance, click Apply.

For new rows in the table:

  • Each new account will be added under the selected parent symbol.

For modified accounts:

  • Any description changes will be applied.
  • Any changes to the ‘weight’ setting will be applied.
  • If the parent account is changed, the account will be reassigned to the new parent with the specified sort order.

    Note: If an existing symbol becomes a parent, virtual status will be set to ON.

  • Any changes to the sort order (same parent account) will be applied.

For new rows flagged as removed in the table:

  • Each account will be removed from its parent symbol.

Results:

  • All actions performed are presented at the end of processing with:
    • Each row identified by its symbol name.
    • The action performed or the reason any error occurred.
  • Any valid changes, not cancelled, are applied.

Refreshing the accounts

Click Refresh to refresh the list of accounts.

Click Symbols to change the selected discrete item account and refresh the list of accounts.

In either case, if there are any unapplied changes, you will be prompted to apply or discard any changes that have not yet been applied.

  • Choose Apply Changes to apply any changes made, then refresh the list of accounts. If there are any errors the refresh will not be performed.
  • Choose Discard Changes to discard any changes made, then refresh the list of accounts.
  • Click Cancel to return to the table without refreshing the list of accounts.

Exporting from the accounts table

  1. Click Export to export from the accounts table to a .csv file.
  2. Select the .csv file to export to.

    Note: If the file selected does not currently exist, it will be created during the export process.

  3. Click OK. A confirmation dialog will appear.
  4. Click View File to view the exported file.

Exporting disclosure accounts

The Export option in the Manage ETR Disclosure Accounts dialog allows you to export disclosure accounts and their related settings from the database to a .csv file.

To export accounts:

  1. For Option, select Export.
  2. Select the .csv file to export to.

    Note: If the file selected does not currently exist, it will be created during the export process.

  3. Select symbols to export.
  4. Click OK. A confirmation dialog will appear.
  5. Click View File to view the exported file.

Updating the ASC740 ETR Disclosure workbook

The ASC740 ETR Disclosure workbook is the starting point to create the required ETR disclosure under U.S. GAAP. The workbook is available in the custom files location in the disclosure folder. Additionally, the second copy named as ASC740 ETR Disclosure_Template represents the original workbook and may be updated on the subsequent upgrades.

The ASC740 ETR Disclosure workbook includes the following sheets:

  • Setup: includes the global settings used by the other sheets.

  • Disclosure: includes the final disclosure report.

  • Country specific sheets: each of which includes the ETR adjustments for a specific country. These sheets are used to facilitate any country specific breakdowns in the Disclosure sheet.

  • Domicile: includes the ETR adjustments for the country of domicile as configured in the Setup sheet.

  • Total Countries: includes the ETR adjustments for all countries and is used in the calculation of the Disclosure sheet.

Design Notes for the Workbook

  • All the sheets containing data, refers to the Setup sheet.

  • The value in U.S. Federal Statutory Tax Rate (account ETR_Category_01) represents the net income before applying the tax for continuing operations at the consolidated tax rate.

  • In the Disclosures sheet the ETR is calculated as a sum, to include the value in U.S. Federal Statutory Tax Rate (account ETR_Category_01). In the other sheets it is a query, which excludes the value in U.S. Federal Statutory Tax Rate (account ETR_Category_01).

  • The percent is calculated as a percent of net income before referring to the tax from the Setup sheet.

  • The Foreign Tax Effects section of the Disclosure sheet uses the country-specific sheets to isolate the effects from countries other than the domicile country.

Updating the Setup sheet

The setup sheet includes the global settings used by other sheets in the workbook. By default, the sheet includes two years, and the domicile country is set to the United States. The country of domicile is used in the Domicile sheet and for all accounts in the Disclosure sheet, excluding the following:

  • U.S. Federal Statutory Tax Rate (ETR_Category_01)

  • Foreign Tax Effects and any country breakdowns

Add an year to the disclosure

To add an additional year to the disclosure:

  1. Select the Setup sheet.
  2. Before Reporting Currency, insert a row.
  3. In the column A for the new row, type description for an additional year.
  4. In the column B for the new row, type a value.
    1. You may use a system attribute for this column as this value gets updated automatically after year end rollover.
    2. You may also want to give the cell a specific name to provide its reference in other sheets. To provide reference of the cell, in the Name box, type a specific name.
  5. In the column E, copy the formula in the row above to the new row, to get the net income before tax amount for the additional year.
  6. In the Name box, type a specific required cell name if you want to provide that cell name reference in any other sheets
  7. In each sheet, copy the column range from G through I and paste it to columns K through L.
  8. In the column K (Amount), update the formula reference for time period (PreviousYear) to the cell containing the additional year.
  9. In the column M (Percent), update the formula reference for net income before tax (NIBT_PreviousYear) to the cell containing the net income before tax value for the additional year.
  10. Refresh the workbook to view updated values.

Modify a Country of Domicile

To modify a Country of Domicile:

  1. Select the Setup sheet.
  2. In the column B beside Jurisdiction of Domicile, change a value to the name of the country symbol.
    The description in the column C gets updated.
  3. Refresh the workbook to view updated values.

Adding a country to the workbook

Depending on the level of detail in your disclosure you may need to add additional countries to the workbook for reference in the Disclosure sheet.

To add a country to the workbook:

  1. Right-click an existing sheet tab and then on the pop-up menu, click Move or Copy.

  2. In the Move or Copy dialog, select the Create a copy check the box .

  3. Under Before sheet, select a position to insert the new sheet, and then click OK.

  4. Rename the sheet to represent a related country.

  5. In the cell A1, update a symbol name to be the correct country.
    The cell B1 automatically displays the updated description.

  6. Refresh the worksheet to view the updated values.

Adding Accounts to the Disclosure sheet

You may need to add more accounts to the disclosure sheet depending on the details that your company needs to disclose.

To add additional accounts to the disclosure:

  1. In the Disclosure sheet, unhide the column A.
    1. Select the entire sheet.
    2. In the column B, right-click the column header, and then in the pop-up menu, click Unhide.
  2. Copy an existing row that you need to insert and paste it above the ETR row.
  3. In the column A,update the account name.
  4. Refresh the worksheet.
  5. Hide the column A.

The updated ASC740 ETR Disclosure workbook is available for all the users through the ASC740 ETR Disclosure link in the Longview Client. To ensure that a link with the updated workbook is available, place the updated workbook in the disclosures folder within the custom file location.

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