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About apportionment base codes

Apportionment base codes are used to apportion expenses and assets in the Income and Asset Sourcing Workpapers and can be customized.

System defined apportionment base codes

System defined base codes can't be changed. The list of system defined base codes depends on the entity type (subsidiary, division, etc.) and the international filing type (foreign entity or foreign tax credit entity).

User-defined apportionment base codes

A user-defined apportionment base is constructed based on user-defined statistics (i.e., square feet, direct labor, direct material, etc.). User-defined bases are available to apportion expenses in both the FTC (domestic) and Foreign Entity Income Sourcing Workpapers and assets in the Foreign Entity Asset Sourcing Workpaper. Any account apportioned using this base is spread among all source codes assigned to the base in the same proportion as the entered numerator amounts.
User-defined bases are assigned a unique code in the range 8000-8999 and can be utilized in 2 ways:
  1. Creating a base - Enter source codes to use in the apportionment base. The corresponding amount entered is the numerator which is used to apportion expenses to that source code. The denominator's the total entered for all source codes identified in the base.
  2. Adjusting system-defined bases - Entered amounts are used to increase or decrease a source code numerator which was built for another apportionment base. The user-defined base is added to or subtracted from the modified base in the
    Apportionment Bases - Composite
     screen in
    Charts
    ,
    International Apportionment Bases
    .

Composite apportionment base codes

A composite apportionment base combines (adds) or removes (subtracts) system and user-defined bases to create a new base. These bases are available for apportioning expenses in both the FTC and foreign entity sourcing workpapers. Any account apportioned to this base is spread to the source codes in a ratio built from the combination of one or more bases, or from the exclusion of one or more bases from a given base.
Composite apportionment bases are assigned a unique code in the range 9000-9999. There are 2 ways to combine existing system or user defined apportionment bases.
  1. Adding bases together - List the bases that should be combined by setting the Add/Subtract field to Add for all base codes.
  2. Subtracting bases from other bases - Select the root base(s) and set the Add/Subtract field to Add. List the bases that should be excluded from the root apportionment base(s) setting the Add/Subtract field to Subtract. At least one base should have the Add option selected.
You can create a composite apportionment base code in
Charts
,
International Apportionment Bases
,
Composite
.

About R&D account type apportionment base codes

R&D Account Type Apportionment Base Codes are used to create customized apportionment bases to exclude certain account types from the R&D gross income base (403).
The amount excluded from the R&D gross income base is built by reviewing all entities in the affiliated group. Only account types included in the gross income base can be excluded.
For example, to create an apportionment base code to apportion R&D expense on the basis of affiliated gross income excluding sales returns and allowances, when creating the base, select account type 0100 in the dropdown. This creates a new base that can be used in the place of the system-defined R&D gross income base (403) for the apportionment of R&D expenses.
You can create an R&D account type apportionment base code in
Charts
,
International Apportionment Bases
,
R&D Account Types
.

This article applies to:

  • Product: ONESOURCE Income Tax
  • Return type: 1120 Corporation
  • Subject: Apportionment

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