VAT adjustment - Assets

Screen management

This function is composed of:

• a header that is used to specify the process options and to choose the company and the sites for which the VAT adjustment processing must be carried out,
   
• the Parameter definition tab that displays the start and end dates of the current fiscal year for the Accounting and fiscal context for the selected company.

Header

Options

• Simulation:
  This check box, selected by default, is used to carry out a VAT adjustment simulation. The modification of the assets is not recorded in the database.
  The impact of the processing on the assets can be viewed in the log file displayed at processing completion.
   
• Detailed log file:
  A log file is automatically displayed on processing completion, showing the options for this process, the selected company and sites, as well as the number of processed assets and the number of assets that have been subject to a VAT adjustment.
  
  When this box is ticked, the log file is displayed in the form of a detailed report displaying, in addition to the information specified above, the list of assets that have been subject to a VAT adjustment.  This list shows the adjusted assets after a coefficient variance over time and the adjusted assets after the application of a definitive deduction coefficient. There is a distinction between:
  - the assets acquired in the current FY,
  - and the assets acquired from the first day of the next FY (for which the definitive taxation rate of the current FY becomes the provisional taxation rate).
  
  For each asset, the following information is displayed: Activity sector, Provisional deduction coefficient and Definitive deduction coefficient of VAT , collected VAT amount, VAT adjustment amount and Balance sheet value according to the CoA accounting standards and to the IAS/IFRS, if the process is also applied to the IFRS valuations ( REGVATIAS set to Yes).

Note: the viewing and printing of the log files is possible at any time via the Print log file print request of the ATRACE report code, obtained from the Supervisor function in the Print/Group print menu.

Company selection – Site selection

These tables display both the list of managed companies which the user is authorized for, and the list of financial sites linked to these companies which the user is authorized for.

 When the company setupACCPERCTL - Control of accounting periods (chapter AAS, group CPT) has Yes for value, the company is not displayed in the list as soon as at least of one its context is not synchronized with the accounting period/fiscal breakdown.In this case, it is necessary to launch the processing of Contexts synchronization.
The situation of desynchronization of a context can be viewed on the Detailed status of contexts,Calculation  tab (the value of the Modification type field isCNX and the value of the field Parameter modified isDESYNC).

It is necessary to select the company and the sites involved in the process. By default, after the company selection, all its sites are selected. The user can de-select those that are not concerned by the process.
Provided they belong to the same company, the site(s) involved in the processing can be directly selected, in which case the company to which they belong is automatically selected.

Reminder: the assets MUST be registered in sites attached to the same company. Selecting a second company, or sites linked to another company, leads to the de-selection of the first company selected, after validation of a confirmation message.

Tab Setup definition

Processing description

Reminder: the processing is applied to CoA valuations and, if the REGVATIAS - IFRS ledger: VAT adjust. ? parameter TVA ? is set to Yes, to IAS/IFRAS valuations.
The adjustment of non-simulated VAT triggers following operations, depending on the situation of each processed asset:

1/Assets acquired during the current fiscal year of the Accounting and financial fiscal year

Upon acquisition of the asset, a provisional deduction coefficient is determined using the 3 provisional coefficients described above. The provisional coefficients must then be fixed definitively before closing the fiscal year in order to become definitive coefficients and determine a definitive deduction coefficient.
The adjustment is linked to application of the final VAT deduction coefficient. It is applied before the closing on each of the assetsfor which there is a variance between the provisional and the definitive deduction coefficient. 
 
Adjustment amount:
 
It corresponds to:
Deductible VAT calculated using the definitive coefficient - Deductible VAT calculated using the temporary coefficient.
This adjustment consists in:
--> An additional VAT deduction if the result of the calculation is positive
--> A VAT repayment if the result of the calculation is negative.

If the variance between the definitive deduction coefficient and the provisional deduction coefficient exceeds, in absolute terms, the value defined by the REGBASDEV - Final VAT prorata fix parameter (by default: 5 points), the adjustment also triggers an update of the balance sheet value and of the depreciation bases (except for the amortization expense plan, for assets in concession). Otherwise, these values and the depreciation plans are not updated.
 For an asset later than the fiscal year, this parameter is never taken into account: as a matter of fact, the depreciation bases are always updated in order to correspond to those that would have been calculated if the asset had been created after determining the definitive deduction coefficient (that is the provisional deduction coefficient for the year N+1).

• The information relating to this type of adjustment is updated in the Fixed asset function:
   
  --> On the Principal tab:
   
  The taxation and deduction coefficients as well as the recovered VAT rates and amounts are updated.
   
  --> On the Depreciation plan: 
   
  When the depreciation basis is updated, the update:
   
  - is taken into account from the current fiscal year start date (or the depreciation start date, if it comes later). The current fiscal year expense as well as the next ones are recalculated based on the new depreciation basis. If closed periods exist for the current fiscal year, the expense of the current period contains the adjustment due to the revision of the fiscal year expense.
   
   - does not involve any change of the depreciation method.
   
  --> On the VAT tab:
   
  - Load of the Additional deduction amount or of the Repayment amount, depending on cases.
  - The definitive taxation coefficient loads the field Yearly taxation coefficient.
  - The Yearly coefficients load the fields Future reference coefficients which become Effective reference coefficients after closing.
  - Activation of the indicator signaling that a yearly adjustment was carried out.
  - The Adjustments history is updated.
  - The adjustment residual duration is decreased of one year at the end of the closing processing.
  
• An event of VAT adjustment – Assets (FASVATREG) is generated on the accounting plan (and if needed on the IAS/IFRS plan) to enable the posting of the repayment or additional deduction of VAT.

Remarks

• If no event justifying an adjustment modifying their value takes place during the acquisition year, the definitive coefficients become the reference coefficients. Multiplying these 3 coefficients gives the reference deduction coefficient with which the yearly adjustments (linked to the variation of coefficients over time) or global adjustments are carried out in the case of a change in the effective usage of the asset during the legal adjustment period.
• If a global adjustment (linked for example to an issue or activity sector transfer) intervenes during the investment fiscal year N, the adjustment triggered by the variance between the provisional and the definitive deduction coefficient is only calculated for the year N (1/5 or 1/20, depending on whether it is a fixture or a real asset) as the global adjustment implied an adjustment over the whole adjustment period not yet accrued (4 or 19 years).

2/Assets acquired during a fiscal year previous to the current fiscal year from the Accounting and financial context

Each year, during the adjustment period, when the difference between the multiplication of liability and taxation coefficients of the year on the one hand and the multiplication of reference liability and taxation coefficients on the other hand is superior in absolute value to the value set up at the level of setup REGVATDEV - VAT variance over time (by default: 10 points), the following must be done: an adjustment of the tax initially deduced from the assets acquired in a previous fiscal year must be carried out. (The multiplication result is not rounded up in order to determine the value of the variance). 
 
Comments:

• The value of the admission coefficient of the year is not taken into account in the calculation carried out to evaluate if it is necessary to carry out a yearly adjustment. However, the value of this coefficient is kept in the adjustment calculation.
• The assets whose reference liability coefficient is equal to 0 are definitely excluded from the yearly adjustment process.
• The asset acquisition year is taken into account as a whole year.
• If the asset is used only part of the year, no prorata temporis is calculated.
• The reference coefficients to be used are the effective reference coefficient that have been updated because of a global adjustment.

Adjustment amount:
 
It is calculated using the difference between the deduction coefficient of the year and the reference deduction coefficient:
VAT invoiced x (deduction coeff for the year - reference deduction coeff) / 20 (real asset) or 5 (movable property)

This adjustment consists in:
--> An additional VAT deduction, if the deduction coefficient of the year is superior to the reference deduction coefficient.
--> A VAT repayment, if the deduction coefficient of the year is inferior to the reference deduction coefficient.

• The information on this type of adjustment is updated on the VAT tab of the Financial assets function:
   
   - Loading, depending on the case, either of the Additional deduction amount, or of the Repayment amount.(the Adjustment totalE-1 is updated upon closing).
   - The definitive taxation coefficient loads the field Yearly taxation coefficient.
  - Activation of the indicator signaling that a yearly adjustment was carried out.
  - The Adjustments history is updated.
  - The adjustment residual duration is decreased of one year at the end of the closing processing.
  
  --> On the Principal tab: 
   
  The recovered VAT rate and amount are not modified (these are the reference values).
   
  --> On the Depreciation plan: 
   
  If the setup REGMAJBAS - VAT variance basis update is set to Yes, the tax and additional deductions are recorded upon modification of the receipt cost and thus update the balance sheet value (with the exception, for assets In concession, of that of the plan managing the amortization expense). No depreciation method change is applied. The depreciation variance is adjusted on the last depreciation fiscal year.
   
  
• An event of VAT adjustment – Assets (FASVATREG) is generated on the accounting plan (and if needed on the IAS/IFRS plan) to enable the posting of the repayment or additional deduction of VAT.

Grid summing up the adjustment and update conditions of the bases:

	Adjustment	Basis update
Fixing definitive coefficients	Always	If variance between provisional and definitive coeff.>  0.05 (value defined by setup REGBASDEV)
Variation On the time:	If variance between: definitive (liability coeff. x taxation coeff. (of the year) and reference (liability coeff. x taxation coeff. > 0,1  (value defined by setup REGVATDEV)	Optional (defined by setup REGMAJBAS)

* With the exception; for assets In concession, of the basis of the plan managing the amortization expense.

Examples of yearly adjustments

Year N: Asset acquisition year: 4,000 € ex-tax - Invoiced VAT = 784 €
The setup REGVATDEV - VAT variance over time has the value: 0.1

• Provisional deduction coefficient = (1 x 0.45 x 1) = 0.45
  Subjection coefficient = 1
  Taxation coefficient = 0.45
  Admission coefficient = 1
• Provisional VAT deduction = 784 €  x 0.45 = 352.80
• Definitive deduction coefficient = (1 x 0.5 x 1) = 0.5
  Subjection coefficient = 1
  Taxation coefficient = 0.5
  Admission coefficient = 1
• Additional VAT deduction = (784 € x 0.5) - 352.80 = 39.20 €

Year N+1

• Definitive deduction coefficient of the year = (1 x 0.62 x 1) = 0.62
  Subjection coefficient = 1
  Taxation coefficient = 0.62
  Admission coefficient = 1
• Variance between the multiplication of liability and taxation coefficients
  (1 x 0.62) - (1 x 0.50) = 0.12 > 0.1 --> additional deduction
•  Additional deduction amount
  784 € x [ (1 x 0.62 x 1) – (1 x 0.5 x 1) ] / 5 = 18.82 €

Year N+2

• Definitive deduction coefficient of the year = (1 x 0.44 x 1) = 0.44
  Subjection coefficient = 1
  Taxation coefficient = 0.44
  Admission coefficient = 1
• Variance between the multiplication of liability and taxation coefficients
  (1 x 0.44) – (1 x 0.50) = - 0.06 < 0.1 --> no adjustment

Year N+3

• Definitive deduction coefficient of the year = (1 x 0.20 x 1) = 0.20
  Subjection coefficient = 1
  Taxation coefficient = 0.20
  Admission coefficient = 1
• Variance between the multiplication of liability and taxation coefficients
  (1 x 0.20) – (1 x 0.50) = - 0.30 > 0.1 --> VAT repayment
• Repayment amount
  784 € x [ (1 x 0.50 x 1) – (1 x 0.20 x 1) ] / 5 = 47.04 €

Notes

1/ This VAT adjustment process must be submitted before the closure of the Accounting and fiscal fiscal year.

2/ It can be run several times.

Batch task

This function can be run in batch mode. The standard task FASVATREG is provided for that purpose.

Error messages

The only error messages are the generic ones.

Tables used

Refer to documentation Implementation