Configuring tax rates

Axiom allows you to modify tax rates for each company for which the tax equivalency adjustment process will run. The system sub-tab displays all of the companies where the company record has been assigned a tax exempt account in the TaxExemptAcct column of the Company dimension.

  • If there are currently no rates in the specified table, you will need to enter tax rates.

  • If rates exist, you can update them accordingly.

You identify tax-exempt loan and security accounts in the TaxEquivalent column of the Account dimension as Tax Equivalent (TE). When the yield record is processed for the GLYYYY table, it adds Tax Equivalent adjustment records to all accounts with a TE designation. These records are identified with data types of TE, which is the periodic amount, and ANNTE, which is the annualized TE amount used to calculate yields.

During reporting, you can report Tax Equivalent income and yields, which adds TE to interest income, and ANNTE to the denominator used to calculate the yield. The tax equivalent adjustment is calculated as TE= (INT/(1-TaxRate))-INT, where INT is actual interest earned on the loan or security. Therefore, a zero rate for any given account and/or period will result in a zero balance for the TE or ANNTE record for that account and/or period.

To configure tax rates for financial reporting: 

  1. On the Manage Data tab, click the Tax Rates sub-tab.

  2. From the Select GL Table drop-down, select a GL table.

  3. In columns M1-M12, type new or adjusted tax rates for each company, as needed.

    IMPORTANT: Changing historical tax rates will change Tax Equivalent values.

  4. Click Save.

The modified rates are now available when processing yield calculations, which generates tax equivalent adjustments for yield reporting.