02 — Capability · BC-240.50
Tax Accounting & Provision
Compute the tax expense, current and deferred, that the financial statements carry, and reconcile it to the returns eventually filed so the two tell the same story.
- Tax Provision
- Income Tax Accounting
In scope
- Current and deferred tax calculation
- Uncertain tax position reserves
- Return-to-provision reconciliation
Out of scope
- The financial statements and close process the provision feeds (see BC-210)
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- BC-240.50.10Current & Deferred Tax CalculationCompute the period's tax expense and the deferred balances arising from book-tax differences, by entity and jurisdiction, at each reporting date.
- BC-240.50.20Uncertain Tax PositionsIdentify positions a tax authority might challenge, assess the likely outcome and hold a reserve that reflects it.
- BC-240.50.30Return-to-Provision ReconciliationCompare the provision booked at year-end with the return filed months later and record the difference, with the reasons, in the next period.
- BC-240.50.40Tax Disclosure SupportProduce the effective rate reconciliation, deferred tax rollforward and other notes the financial statements require, tied to the provision.