Producing a detailed Imputation Credit Note in Statutory Reporter

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An Imputation Credit Account is an off-balance sheet, information account used to keep track of how much income tax the company has paid, and how many imputation credits it holds to pass onto its shareholders.

When a company pays income tax, the company gains the same amount of tax paid, in the form of imputation credits. These imputation credits can then be attached to dividends paid to shareholders by the company.

There are two Imputation Credit Account (ICA) notes available in Stat Reporter:

The Imputation note NTD is a simple paragraph using non-transaction data (NTD) values to disclose the balance of the Imputation Credit Account for this year and last year.
The Imputation Note provides a detailed analysis of the Imputation Credit Account with the Opening Balance, plus or minus movements to derive the closing balance.

By default, the Imputation note NTD is selected to appear in the Notes to the Financial Statements when generating reports for your client using Statutory Reporter. To display the detailed Imputation Note, this needs to be selected manually from the list of all reports.

If you prefer to use the detailed Imputation note in your client's financials, select the detailed Imputation note from the list of available reports in the Practice Report Settings. The detailed note will be selected by default for all clients of the same entity type across the practice.

About the detailed Imputation note

The detailed Imputation Note displays the balance of accounts in the Other financial accounts > Imputation account group. For an AO Classic chart of accounts, the accounts in this group are:

996/80 - the Imputation Credit Account consisting of the opening balance (brought forward from last year's closing balance).
996/81 - 996/89 - the range of accounts to record other movements in the Imputation Credit Account. For example, Imputation Credits attached to Dividends paid.
631/02 - 631/05 - accounts used to capture tax paid during the year.

Imputation credits attached to Dividends paid

To record imputation credits on Dividends paid

Account Code	Description	Debit	Credit
996/81	Imputation credits attached to dividends paid	$ xxxxx
996/99	Information accounts contra		$ xxxxxx

Imputation credits attached to Dividends received

There are two ways to handle imputation credits on dividends received:

A) Gross up dividiends received income in the Income Statement

When dividends are received, the journal entry would be:

Account Code	Description	Debit	Credit
631/04	Dividend withholding tax on dividends received	$ xxxxx
631/05	Imputation Credits on dividends received	$ xxxxx
600	Bank account	$ xxxxx
272	Dividends received		$ xxxxx

This approach requires no additional adjustments or manual mapping of account groups and, will work in both the Tax Note and the Imputation Credit account note.

B) Show net dividends received in the Income Statement

With this approach, dividends received are shown at the net amount received (including any withholding tax), and the difference between accounting profit and taxable income is adjusted for in the Tax Note as a permanent difference. There are several pieces here:

To record imputation credits on dividends received:

Account Code	Description	Debit	Credit
996/82	Imputation credits on dividends received	$ xxxxx
996/99	Information accounts contra		$ xxxxxx

By default, the 996/82 - Imputation credits on dividends received account is mapped to the Other financial information > Out of Range account group. This account will need to be re-mapped into the following account groups:

Other financial information > Tax Note > Non-assessable non-deductible (to appear in Tax Note).
Other financial information > Imputation > Other (to appear in Imputation note).

Duplicate mapping is required to display imputation credits attached to dividends received in both the Tax Note and Imputation note. We recommend performing this account mapping at a Practice Level to avoid the duplicate mapping message when reports are generated.

To record dividend imputation credits to be claimed against this year's tax:

Account Code	Description	Debit	Credit
996/90	Imputation credits utilised this period	$ xxxxx
996/99	Information accounts contra		$ xxxxxx

The amount debited to 996/90 Imputation credits utilised this period will usually be the same as the amount debited to 996/82 - Imputation credits on dividends received. However, this needs to be a different account to allow for excess imputation credits that cannot be utilised.

The account 996/90 - Imputation credits utilised this period does not affect the Imputation note however, it must be taken into account in the tax reconciliation note.

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About the detailed Imputation note

Imputation credits attached to Dividends paid

Imputation credits attached to Dividends received

To record imputation credits on dividends received:

To record dividend imputation credits to be claimed against this year's tax:

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