Calcbench Guide - Analyzing Income Tax Disclosures

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1 Calcbench Guide - Analyzing Income Tax Disclosures What s Inside? Get Started: A. Using Calcbench s online platform B. Using Calcbench s Excel Add-in Analyze Tax Disclosure Text: C.Quickly read & compare tax disclosures for a group of companies Analyze Tax Disclosure Data: 1. Income Tax Provision 2. Tax Rate Reconciliation 3. Deferred Tax Assets & Liabilities 4. Unrecognized Tax Benefits 5. Interest & Penalties 6. Unremitted Foreign Earnings us@calcbench.com

2 What We Do Calcbench harnesses the power of XBRL, providing cutting edge tools for academic research and teaching. We make working with complicated, detailed financial data faster and easier then ever before. Robust: 9,000+company universe with 55 million+ data points Relevant: Multiple products for accessing dataand footnote textto meet your workflow Timely: Real-time updates of the data as companies file Accurate: Continuous data quality monitoring and updates Intuitive: XBRL tag mapping to streamline complexity

3 A Analyze Tax Data - Our Online Platform 1 Go to: 2 Select a group of companies 3 Open data point explorer, and go to the Tax section. Select metrics you are interested in. 4 Work online or quickly export to Excel!

4 B AnalyzeTax Data -In Excel 1 Download our Excel add-in at: 2 Download income tax template at:

5 C Quickly Read & Compare Tax Disclosures 1 Go to: 2 Select a group of companies 3 Choose Income Taxes from drop down list of disclosure types 4 Go to work!

6 Analyzing Common Parts of a Tax Disclosure 1. Income Tax Provision 2. Tax Rate Reconciliation 3. Deferred Tax Assets & Liabilities 4. Unrecognized Tax Benefits 5. Interest & Penalties 6. Unremitted Foreign Earnings us@calcbench.com

7 1 The company s tax provision, split out by federal, state/local, and foreign tax amounts. Also split out by current(the tax amount currently due) and deferred (the portion that will be put off until future periods). Calcbench Metric: EBITDomestic EBITForeign IncomeFromEquityMethodInvestments EBIT CurrentFederalTaxExpense CurrentStateAndLocalTaxExpense CurrentForeignTaxExpense CurrentIncomeTaxExpense DeferredFederalIncomeTaxExpense DeferredForeignIncomeTaxExpense DeferredLocalIncomeTaxExpense DeferredIncomeTaxExpense IncomeTaxExpense EffectiveIncomeTaxRateContinuingOperations From Cash Flow Statement: IncomeTaxesPaid

8 2 A Reconciliationof the difference between the company s effective tax rate, and the statutory tax rate. This may be done in dollars or % or both. FederalStatutoryIncomeTaxRate Calcbench Breakout*: Effective Income Tax Reconciliation (%) EffectiveIncomeTaxRateContinuingOperations IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate Calcbench Breakout*: Income Tax Reconciliation ($) *As reported line item detail for particular schedules and roll-forwards can be viewed & searched at

9 3 A listing of the company s Deferred Tax Assets and Liabilities. Deferred tax assets are items that can be used to reduce tax payments in the future. Deferred tax liabilities are taxes from the current period that will be paid in the future. Calcbench Breakout*: Deferred Tax Assets DeferredTaxAssetsValuationAllowance DeferredTaxAssetsNet Calcbench Breakout*: Deferred Tax Liabilities DeferredTaxLiabilities DeferredTaxAssetsLiabilitiesNet *As reported line item detail for particular schedules and roll-forwards can be viewed & searched at

10 4 Unrecognized tax benefits(sometimes referred to as uncertain tax positions, or ASC 740). These are tax treatments used by the company that the company or its auditor has reason to believe may be disputed by tax authorities in the future. Calcbench Metric: UnrecognizedTaxBenefitsIncreasesResultingFromSettlementsWithTaxingAuthorities UnrecognizedTaxBenefitsDecreasesResultingFromSettlementsWithTaxingAuthorities UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions UnrecognizedTaxBenefitsDecreasesResultingFromCurrentPeriodTaxPositions UnrecognizedTaxBenefits UnrecognizedTaxBenefitsIncreasesResultingFromAcquisition UnrecognizedTaxBenefitsDecreasesResultingFromAcquisition UnrecognizedTaxBenefitsIncreasesResultingFromForeignCurrencyTranslation UnrecognizedTaxBenefitsDecreasesResultingFromForeignCurrencyTranslation Good WSJ article about unrecognized tax benefits here (login required) UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate Other: UnrecognizedTaxBenefitsResultingInNetOperatingLossCarryforward

11 5 Interest and penaltiesrelated to the unrecognized tax benefits (on theprevious slide), if applicable. This includes the total cumulative accrued interest and penalties, and the amount recognized for the period of the filing. Calcbench Metric: UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestAccrued UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestExpense

12 6 Unremitted Foreign Earningsinformation, if applicable, about the cumulative amount of foreign earnings that the company considers to be indefinitely or permanently reinvested (not coming back to the US), and an estimate of the taxes that would be due if those earnings were to be returned to the US. UnremittedForeignEarnings UnremittedForeignEarningsPotentialTaxLiability