Support Query
How do I write back tax deferred amounts?
Solution
Automatic Write Back of Deferred Tax
Deferred Tax will automatically be written back for the full amount in any of the following situations:
- When the last recorded Fund Pension Policy is 100% (or if deemed segregation is in effect).
- The Tax Effect Accounting option in Fund Details is toggled off.
- The Fund has disposed of all assets/investments.
This automatic writeback occurs when creating entries for the financial year. Additionally, this automatic process can be disabled by selecting the relevant toggle in the Entity Details screen:
For manual writebacks of deferred tax, review the instructions below.
To write back Tax Deferred amounts, the following journal entry will need to be entered in Simple Fund 360. It is recommended to post the following entry on the 01/07/** once tax effect accounting has been switched off.
Which entry to record depends on whether the Deferred Tax is allocated to a specific member.
Allocated to specific member:
| Account | Debit ($) | Credit ($) |
|---|---|---|
| Deferred Tax Liability/Asset - 89000 | X,XXX | |
| Writeback of Deferred Tax - 49300/MemberCode | X,XXX |
Unallocated*:
| Account | Debit ($) | Credit ($) |
|---|---|---|
| Deferred Tax Liability/Asset - 89000 | X,XXX | |
| Writeback of Deferred Tax (unallocated) - 49350 | X,XXX |
The Unallocated Method requires an open Accumulation account.
The unallocated method will distribute the writeback of deferred tax to all open accumulation accounts on the date of the writeback. This is based on their weighted member balance.
If there are no available accumulation accounts, this writeback will not be automatically allocated causing the Statement of Financial Position to be out of balance.
Note: You can find the balance of deferred tax amounts through the Deferred Tax Reconciliation Report.