Bloomberg BNA has upgraded its BNA State Tax Analyzer with a new NOL Manager function that predicts and analyzes the financial impact of state net operating losses on a business’s cash, effective tax rate and earnings per share.
While the federal tax code allows 20 years of NOL carryforwards and two years of NOL carrybacks, states vary widely in their NOL rules, Bloomberg BNA noted. Corporations often have to file for multiple entities in multiple states and may need to deal with hundreds or even thousands of returns in a single year. Each filing requires its own NOL supporting schedule that could span 10 to 20 years or more.
“Historically, companies with operating losses on their balance sheets have had to spend countless hours managing spreadsheets with thousands of complex formulas to track, compute, and forecast state NOLs,” said Ken Crutchfield, vice president of Bloomberg BNA’s software products, in a statement. “This can cause a myriad of issues—from manual data entry to spreadsheet calculation errors, to lost cash tax opportunities, or inadequate Sarbanes-Oxley controls. The latest version of BNA State Tax Analyzer enables companies to stay current on the vastly different state NOL rules and, most importantly, removes the uncertainty and risk of manually managing operating losses and predicting cash impacts.”
The NOL Manager feature automatically computes the generation, utilization, carrybacks, and carryforwards of state net operating losses across multiple years and multiple scenarios. The software computes and documents valuation allowances, shows the impact of IRS and state tax audits on NOLs, estimates taxes for financial statements and quarterly estimates, calculates and tracks NOLs from 1998 onward for pre- and post-apportionment states, and forecasts taxes, including future enacted tax law.
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