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Tabular Reconciliation of Unrecognized Tax Benefits

This workboook is used to summarize and track changes to the tax positions that create unrecognized tax benefit liabilities (UTBL) as defined in FASB ASC 740, Income Taxes. This workpaper also generates a tabular reconciliation disclosure of the total unrecognized tax benefits at the beginning and end of the period.

Entering Data

For each identified tax position resulting in an unrecognized tax benefit from the beginning of the reporting period to the end of the period should be entered in the Input Worksheet. For each tax position, the beginning balance for the period should be entered as a positive value. Any increases for current or prior years’ tax positions should be entered should be entered as positive amounts. Conversely, decreases should be entered as negative amounts for these two columns. Decreases in the unrecognized tax benefits of a tax position from settlement payments to the taxing authorities or expiration of the statute of limitations should also be entered as a negative number. Certain input cells are validated to ensure positive and negative numbers are entered appropriately.
After the data is entered, the Input worksheet automatically calculates the ending unrecognized tax benefit balance for each individual tax position. Because FASB ASC 740 does not allow a negative UTBL, if the balance for a particular tax position is negative, the word “error” will appear as the ending balance. If this occurs, recheck your inputs to determine the reason for the negative balance. The Input worksheet also provides totals for all tax position items at the bottom of the worksheet. These balances are used to populate the tabular reconciliation disclosure. The amount at the bottom right of the Input sheet should agree to the ending balance of the tabular reconciliation on the Reconciliation worksheet.    
Note: The Reconciliation worksheet uses a filter to only incorporate the data entered on the Input worksheet. Thus, the Reconciliation worksheet will appear blank until necessary data is entered on the Input worksheet.

Inserting and Deleting Line Items

Additional rows may be added or excess rows may be deleted. See the section “General Workpaper Functionality and Tips for Entering Data” for information concerning the tips for and potential effects of inserting and deleting workbook line items.