Assign accounts in a trial balance

Overview

After Importing a trial balance, completing the following steps will start your tax calculation:

• Assign accounts to the balance sheet and income statement, so the system can start the tax calculation.
• Assign accounts to the tax balances, such as current tax, deferred tax, current tax expense and deferred tax expense.
• Assign accounts to IR10 categories.
• Exclude any account/s from profit before tax (PBT).

Note: You only need to assign accounts in the first tax year, as the system will remember the assignment in the following years.

Assign Accounts to the Balance Sheet and Income Statement

If you have imported data from Xero, and selected Import Reporting Codes, you will not need to complete this step. 

1. On the Trial balance page > All accounts tab, select the check boxes of all the balance sheet accounts. 

   Tip: You can select multiple accounts at the same time – after selecting the first account in the list, hold the Shift key and click the last account in the list.

2. Select Balance Sheet from the drop-down list then select the Apply button.
3. Select the check boxes of all the income statement accounts.
4. Select Income Statement from the drop-down list and then select the Apply button.
5. Select the Unassigned tab to see if there are any remaining unassigned accounts and if there are, assign them to the balance sheet or income statement as applicable.

Assign accounts to tax balances

This step is relevant when preparing a tax return that includes current and deferred tax. Assigning the appropriate accounts to the tax balances is important for the tax provision calculation. Learn more about Tax Account movements.

1. On the Trial balance page, locate the accounts you want to assign to a tax balance.
2. Select the cog icon to the right of the account, then select the relevant option: Current Tax, Deferred Tax, (only applicable to balance sheet accounts); Current Tax Expense or Deferred Tax Expense (for income statement accounts).

Exclude an account from profit before tax (PBT)

If the income statement contains an account that is ‘after tax’ rather than ‘before tax’, such as the tax expense, distributions or dividends paid account, you want to exclude this from the system’s profit before tax calculation.

1. On the Trial balance page, select the Income statement tab.
2. Locate the account you want to exclude from the PBT.
3. In the Workpapers column, select Add workpaper > Exclude from PBT.

Assign accounts to IR10 categories

If you intend to file an IR10, you need to assign the accounts to the correct categories. Once assigned, the accounts will pull into the correct disclosures in the tax return, on the Financial Statements Summary (IR10) tab. If you've imported your data from Xero you will find these have been assigned in line with your Xero report codes. We recommend assigning the correct report codes in Xero to help automate this process when you import future trial balances.

1. From the Trial balance page, select the IR10 tab.
2. To assign an individual account, select the cog icon to the right of the account, then select the category.
3. To assign multiple accounts at the same time, select the check boxes of the accounts, select the relevant category from the drop-down list at the top of the accounts and select Apply.

The CY Retained Earnings column displays either grey or blue ticks. Items with a blue tick next to them are automatically included in the retained earnings line item when completing your IR10 tax return form. These are selected by default when items are coded in the IR10, but can be toggled on and off.

Troubleshooting

Incorrectly assigned an account

To re-assign an account, select the cog icon to the right of the account > select Balance Sheet or Income Statement.

IR10 is not displaying

• If you cannot see an IR10, ensure the Financial Statements Summary (IR10) setting is turned on. From the entity’s home screen, select the three ellipses in the navigation bar > Settings. Then in the Return Settings section > Financial Statements Summary (IR10) option, ensure Yes is selected.

What's next?

Now can you start adding workpapers to your accounts.

Related Articles

If you're working with deferred tax, you can learn more about Tax Account movements.

Read more about completing an IR10 when you review and finalise an income tax return.