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Tax provision software implementation on the consolidated group result.
We survey how the group result, the rate reconciliation and the deferred tax schedules reach your provision today. The price is fixed after that read.
Tax provision software reads the consolidated result, and the implementation decides whether it reads the right 1.
Tax provision software calculates the current and deferred tax charge for every entity and for the group, from the same consolidated result the accounts report. Constancia is an EPM consultancy, and we implement it for multi-entity groups whose provision reaches the accounts late.
HMRC has charged the main rate of corporation tax at 25% since 1 April 2023, on profits above £250,000. The rate reconciliation for every UK entity in the group starts from that figure and explains each step away from it.
Where the tax team receives the group result as an extract and a journal follows it, the provision reads a result that no longer exists. The tax director finds out when the effective rate in the accounts differs from the rate in the provision memo.
The group result, the rate reconciliation and the deferred tax bridge each have a rule in the model.
The OECD's Pillar Two rules set a 15% minimum rate for groups with revenue above €750 million, and the provision computes it per jurisdiction.
01
The group result reaches the provision through the model, on the day it is signed.
The provision reads the consolidated profit before tax, entity by entity, from the cube the accounts read. A late journal reaches the provision in the same run as the accounts.
- Profit before tax by entity and jurisdiction, from the consolidation, on 1 date
- Permanent and temporary differences held against the accounts they adjust
- A provision that reruns when the group result moves
02
The rate reconciliation explains every step from the statutory rate to the effective rate.
The reconciliation starts from the 25% UK rate, or each entity's local rate, and lists every item that moves the effective rate away from it. Every item traces to a journal or a schedule the auditor can open.
- 1 line per reconciling item, with its owner and its source schedule
- Local rates held per jurisdiction and per period, dated
03
The deferred tax bridge moves each balance from opening to closing with a reason.
Every deferred tax asset and liability rolls from the opening balance through the charge, the movements in equity and the acquisitions to the closing balance. The bridge closes to zero, or it names the line that does not.
- Temporary differences by category, per entity, per period
- Recognition of losses assessed and recorded, with the person who assessed it
- Movements in reserves posted where IAS 12 puts them
- Acquired balances dated from the completion date
The provision build runs through 5 stages, and a year end done both ways proves the fifth.
- 01
Survey
We read last year's provision back to the consolidation it used, and mark every figure the tax team retyped from an extract.
- 02
Price
We fix the implementation price on that read, and an entity whose deferred tax schedules exist in nobody's system is already inside it.
- 03
Design
The design sets the entity and jurisdiction structure, the rate tables, the difference categories and the sign-off route, with 1 owner each.
- 04
Build
The consultants who ran the survey build the provision on OneStream (EPM software), reading the consolidation your accounts already use.
- 05
Parallel run
Your tax team runs 1 year end in the old workbook and in the platform, and signs the platform in when the 2 provisions agree.
35 years and 58 implementations sit behind the survey, and the people who did it stay through the build.
The provision is work we take on when a group meets 4 tests.
- 01
Entities in more than 1 tax jurisdiction
The group pays tax in 3 or more countries, and each jurisdiction has its own rate, its own rules and its own filing date.
Read about statutory reporting - 02
A provision calculated from an extract
The tax team works from a spreadsheet export of the consolidation taken on 1 day, and the consolidation moves after that day.
- 03
A year end with a hard date
A listing, a group audit or a Pillar Two return has set the day the provision has to be signed by.
Read about consolidation - 04
A consolidation already on a platform
OneStream or a platform like it already holds the group result, and the provision could read it directly.
Read about OneStream
A single entity with 1 rate and 1 return calculates its provision in its ERP or its adviser's workbook, and needs nothing on this page.
The provision runs on OneStream beside the consolidation it reads, and the group's footprint decides the edition.
OneStream (EPM software)
The full platform, for a group with entities in several jurisdictions
- For a group with local rates, local GAAP adjustments and Pillar Two to compute
- Current tax, deferred tax and the rate reconciliation in the cube the accounts read
- Tax, statutory and management views of 1 result, with the bridges between them
OneStream CPM Express
The standard model, for a UK group with 1 rate and a handful of entities
- For a mid-market group consolidating in workbooks, with its provision in another 1
- The consolidation OneStream has already built, with the provision reading it
- A move onto the full platform when a second jurisdiction arrives
Constancia is an official OneStream partner with certified consultants, and the survey says which edition your provision needs.
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