Tax Provision allows tax professionals to calculate their tax provisions in order to project their tax
liabilities.
ASC 740 is accounting for income taxes using GAAP standards. It requires businesses to disclose
income tax risk. It soley analyze focus on the income taxes a corporation will pay.
There are four components of a tax provision: current payable, deferred taxes, Uncertain Tax
Benefits (UTBs), and the Rate Reconciliation.
1. Current Payable – these are the taxes owed to each jurisdiction.
2. Deferred Taxes – these are future tax impacts coming from current or past business
activities from each jurisdiction.
3. Uncertain Tax Benefits – these are tax impacts related to the gray area of the tax law.
4. Rate reconciliation – this section explains why the company’s tax rate is different from the
statutory rate.
Here is the interface of TAX Provision.