The Income Tax Automation will work through a series of steps to compare the ledger balance to the worksheet balance and journal the required values of Income Tax Expenses for the period.
To learn more, watch the below video:
To use this Automation feature in your binder, read on for detailed instructions:
The Income Tax Automation is designed to work with worksheet C20 Tax Reconciliation. The Automation will insert the relevant worksheet required to complete the supporting work if it does not already exist in the binder.
Begin by selecting Run on the Income Tax Automation against the Income Tax Expense or Income Tax Payable account.
If there are distinct accounts associated with the expense and payable, the automation will aim to detect those, so it doesn't matter which of the accounts you choose.
Next, the Automation will recognise if the C20 Tax Reconciliation workpaper exists within the binder. If not, the Automation will add this record.
Step 3 looks at identifying any required balances. If there is a balance in the C20 Tax Reconciliation workpaper, the Automation will recognise this value and use this to compare against the general ledger before processing any journals. The workpaper value changes based on changes to other linked workpapers.
The final step will compare the worksheet balance to the ledger balance and recognise the appropriate payable and expense journals required to reconcile the ledger back to the worksheet.
Once these steps have run, the Automation has completed its work. The system will then raise an automated journal for the relevant Income Tax Expense and/or Payable accounts and reconcile your workpaper back to the ledger.
The Automation does not stop working here! As you work through your Tax Reconciliation and any supporting reconciliations, any changes to the Income Tax Expense workpaper balance will cause the Automation to re-run in the background and adjust the journal when required.