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While the rate-base calc can feel like a chore, it has far-reaching implications for the broader business, ultimately impacting the profitability of the entire company. With so much as stake, it’s important for utility tax professionals to understand the full picture, be familiar with best practices, and ultimately to ensure that big number is 100% accurate.
ADIT cannot be overlooked as a source of financing. The magnitude of ADIT has grown over the years due to tax policy geared toward incentivizing capital investment. The importance of ADIT to cash flows and rate base has increased exponentially with the increase in ADIT precision and reporting requirements required under FAS109, Sarbanes Oxley, and FIN48. A nimble tax department needs a way to understand, maximize and track its regulatory ADIT.
In this webinar, our panel of RCC and ASI industry experts cover a range of topics to provide an in-depth understanding of ADIT. They discuss the importance of the property-related deferred tax balances and provide guidance on how to understand and validate the timing differences. They also highlight the role of automation in streamlining the ADIT management process and showcase the benefits of using ASI software to help put controls in place to manage the process and automatically generate audit-ready reports.
Please refer to your follow up email for the password to view the webinar recording!
We built our software solution, ASI, to address challenges that are unique to the utility industry. The way we see it, these challenges can be broken down into 2 key categories:
RCC baked our industry know-how into ASI, so all of the crucial checks that come with decades of utility finance expertise are pre-programmed into the solution. To quote a current ASI customer:
ASI is like having a seasoned utility accounting expert sitting there in your cube or your home office walking you through how to understand your tax balances, and weeding through millions of data points to find and show where you have issues.
It takes many systems acting in harmony to calculate and report on property-related deferred taxes. Changing out or upgrading any one of the systems used does not remove the need for independent validation that the ADIT is calculated and reported correctly. So if you switch out your deferred tax system for a cloud-based version, or you move to a different GL, you still need a way to validate the data upstream, within, and downstream of your deferred tax software.
We created ASI to act as the third-party solution to validate data across any system. ASI is not a GL, or a deferred tax system, or a replacement for Excel. Rather, the obsession of ASI is ensuring that your data is right across your entire system landscape. As an example, in 2022, at a single utility tax customer, ASI performed 138,000,000 checks across all of their tax systems and processes, resulting in their audit teams telling them that they love to audit them. It’s just so easy. At the highest level, ASI imports information from all the software that influences the ADIT calculation. ASI’s data validation engine then serves as an army of utility tax experts checking every corner of the calculation for problems.
Learn more about ASI and how it functions in relation to the ADIT calculation in the presentation below.
Section 1: Importance of the property-related deferred tax balance
For financial statements
Section 2: How to understand and validate your deferred tax timing difference
Section 3: How automation streamlines this process