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Tax Recon - SoFP and SoCI (Cloud) ​

What it is: The Tax Reconciliation in Draftworx Cloud is the process of ensuring that the income tax figures on the Statement of Financial Position (SoFP) and Statement of Comprehensive Income (SoCI) agree to the calculations on the Tax Calc sheet.

What it's for ​

After completing the notes and financial statements, the SoFP and SoCI tax figures must reconcile to the Tax Calc sheet. Draftworx Cloud's Status Sheet flags any differences. The Tax Calc sheet handles various entity types (standard companies, small businesses, micro businesses, farming entities, share block companies) and includes built-in calculations for Capital Gains Tax and Assessed Loss limitations. Once all differences are resolved, the Status Sheet should show zeros.

How to do it ​

Fixing tax reconciliation differences ​

  1. Navigate to the Status Sheet on the AFS — any tax differences will be flagged here.
  2. Select the TaxCalc hyperlink to jump to the Tax Calc Sheet.
  3. In the Income Tax Computation, set any applicable tax considerations to Y: Farming Calculation, Small Business Tax Rates, Micro Business, or Share Block Company.

Entering tax adjustments ​

  1. Debit Adjustments (decrease net profit / increase net loss): enter as negative amounts in the dark blue Input Cells. Choose the adjustment type from the drop-down — the system adds rows automatically as needed.
  2. Credit Adjustments (increase net profit / decrease net loss): enter as positive amounts in the dark blue Input Cells. Choose from the Credit Adjustment Line Item drop-down.

Capital Gains and Assessed Loss ​

  1. For any Taxable Capital Gain: select the Calc hyperlink, enter the disposal data in the input cells, and the system calculates the Capital Gains Tax automatically. For complex amounts, enter the Taxable Capital Gain directly.
  2. For any Assessed Loss: select the Calc hyperlink, enter the data, and the Assessed Loss Allowed calculates and flows back automatically.

Reconciling to the statements ​

  1. Confirm the Total per Statement of Comprehensive Income on the Tax Calc matches the tax expense on the SoCI. If not, post an adjusting Journal or correct the Tax Calc entries.
  2. Confirm the Total per Statement of Financial Position on the Tax Calc matches the tax asset/liability on the SoFP. Enter any Payments, Refunds, or other Tax Adjustments in the input cells.
  3. Once all differences are resolved, the Status Sheet will show all zeros.

Tax Calc Rates can be updated in Client Setup - Financial Years, or directly on the Tax Calc Sheet.

Source ​

https://draftworx.helpjuice.com/en_US/cloud/draftworx-cloud-tax-recon-statement-of-financial-position-and-statement-of-comprehensive-income

Walkthrough ​