Deferred Taxes Consolidation

1 Prerequisites

The prerequisite for an automatic calculation of deferred taxes in the group is the existence of a consolidation parameters LT (KTKPARLT). Without a KTKPARLT there is no corresponding state in the group monitor.

2 Consolidation Parameters

The CNSPAR application must create one consolidation parameters (LT) per sub-group, period, and fact. The definition only has to be made once, in the following years the parameter is carried forward as part of the group carry forward.

Only the accounts in the upper section of the individual rate KTKPARLT marked red are relevant for calculating the deferred tax in the group financial statement.

First it can be specified whether minority interests are to be expected on deferred tax vouchers. In addition, the tax rate as a percentage with which the tax is to be calculated must be saved. The offsetting indicator can be used to set (indicator X) that only one posting pair with the balanced debit/credit value is created for each original document, company and business unit.

The P+L and balance sheet accounts must also be deposited for deferred tax assets and liabilities. If the optional account 'Equity' is specified, deferred taxes are booked not only for consolidation postings of the P+L (accounts with balance sheet/P+L indicator 3 for Income and 4 for Expenditure) but also for consolidation postings of capital (accounts with statement of accounts of transaction development type K for Capital).

In addition, a separate profit carried forward account can be entered, which is to be carried forward to in the following period.

Here, too, it is possible to save a clearing account if necessary.

The lower section of the consolidation parameters serves as the "fallback" level for calculating the deferred tax in the company financial statement on a group data type. If no data in the TXRT application are saved on the corresponding group data type and period in the company financial statement, the entries in the consolidation parameters are used (if necessary via the calculation of the fact group structure).

3 Rate

There are two ways to save tax rates:

3.1 Uniform Tax Rate for the Whole Consolidation Parameters Group

The deferred tax consolidation parameters may specify a uniform corporate group mixed tax rate that is used for all Group companies and all consolidation functions of the group.

3.2 Individual Tax Rate per Company

If the tax is to be calculated for certain companies, e.g. foreign companies, at a percentage rate different from the group tax rate, these tax rates can be saved in the deferred taxes header rates (TXRT) application. If a different mixed tax rate is filed, this precedence is used before the tax rate in the consolidation parameters.

4 Calculation of Deferred Tax

The deferred tax is calculated from the IDL.KONSIS 2016.1 release based on the allocation in the respective consolidation parameters. The following consolidation parameters may provide an entry for activation of the deferred taxes fitting:

• CC (first consolidation capital), TC (minority interests first consolidation), NE (first consolidation equity not liquidity-effective) and CS (difference amount in sequent consolidation)
• EF (Equity first consolidation) and EU (Equity update actual modification)
• CD (consolidation of debts)
• ZA (elimination of interim profit for fixed assets) and PU (elimination of IC-profit for current assets)
• JM (Manual postings)

With the consolidation parameters switch 'deferred taxes', deferred tax calculation indicators are set for all consolidation postings of the P+L (accounts with balance sheet/P+L indicator 3 for income and 4 for expenses) and of the capital (accounts with account statement of transaction development type K for capital, if the corresponding account has been recorded in the parameter).

Example of consolidation of debts:

CNSPST CONSOLIDATION OF DEBTS

The deferred tax is calculated using the context menu in the group monitor. This application can only be started globally for the whole group because most consolidation documents contain postings for two companies. For the companies for which posting vouchers are created, the LT state in the GRPMNR turns green. If the application is restarted, all already existing LT vouchers and postings are first deleted and then reconfigured.

Start LT calculation in GRPMNR

CNSPST Deferred tax posting

The entry text shows the percentage of the mixed tax rate used and the basic consolidation voucher.

Even when single consolidation postings are captured, the entry is set for deferred taxes if deferred taxes are enabled in the associated consolidation parameters.

By subsequently editing consolidation postings, including by changing quantities (specifying an asterisk '*'), an automatically set activation of the deferred taxes in the consolidation postings can be manually deactivated.

5 Consolidation Vouchers and Postings

The resulting consolidation vouchers have the consolidation function 'TX' and the posting type that the original voucher has (exception: from 'WV' for manual vouchers, 'EU'). The voucher numbers are based on the original voucher and a voucher consolidation function (CNSFNC) is differentiated as follows:

6 Carry Forward into the Following Period

The carry forward of deferred tax vouchers can be made in two different ways.

6.1 Summary with Original Voucher

During carry forward, the original voucher and the deferred tax voucher are combined, e.g. a VS voucher is taken from a SC voucher and the associated LS voucher in the following period. The postings are presented in the same way as the corresponding posting type. The settings are made in the document circles/consolidation functions CNSFNC application:

Summarize LT carry forward

The carry forward of the deferred tax document, such as the carry forward of the CD consolidation of debts, is controlled here in the carry-forward document VS.

Original postings

Both vouchers are combined to form a VS voucher during carry forward into the following period:

6.2 Carry Forward in a Separate Voucher

There is the option to have the deferred tax document carried forward in a separate voucher. Consolidation functions have been provided for this purpose by default, each of which begins with the letter "W" (see chapter 5). To do this, the following settings must be made in the CNSFNC application:

LT separate carry forward

In this case, the deferred tax document LM will be carried forward separately in voucher with the consolidation function WM in the following year.

Original voucher

In the following period, the Settings the vouchers carried out separately:

7 Change of Calculation Method from Release IDL KONSIS 2016.0 to 2016.1

The deferred tax has not been booked automatically up to and including release IDL.KONSIS 2016.0 for all vouchers affecting net income and capital for the current groups, facts and period. Instead, the user had to mark the vouchers for which the tax was to be calculated. Since the identification of consolidation vouchers for calculating deferred taxes has not been carried out, the "Select consolidation vouchers" functions in the "deferred taxes" menu branch have also been omitted.

As of the release date IDL.KONSIS 2016.1, the calculation method was converted to the procedure described above.

In order for the above-described automatic function to be operational in the first period after the change to the IDL.KONSIS 2016.1 release, the consolidation parameters must be marked after the Group carryforward and the carry forward repeated thereafter.

8 Case Study

If deferred taxes are to be posted in the current assets for the consolidation function elimination of … results consolidation postings, the following measures must be carried out:

1. In the consolidation parameters elimination of … results in the current assets (KTKPARZU) the entry deferred taxes is activated.
2. The elimination of … results processing in the current assets (Zu) is to be carried out in the Group monitor. The generated consolidation postings of the P&L and the capital automatically receive an entry deferred taxes.
3. It may be possible to add to the TO consolidation postings on processing the individual record retrospectively. The recorded consolidation postings of the P&L and capital also automatically receive an entry deferred taxes.
4. It may still be possible to remove deferred tax entries in the TO consolidation postings via individual record processing or quantity changes later on.
5. The processing 'deferred taxes make a posting' must be carried out globally in the group monitor. Deferred taxes are calculated and posted for all consolidation postings with an entry for deferred taxes. The deferred tax voucher is assigned the voucher number LZ at the exit.
6. After double-clicking on a green LT status cell, the consolidation postings generated for the Group company are displayed for deferred taxes.