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SUNNYVALE, CA, October 5, 2006 – Liquid Engines, the leading provider of corporate tax management software, today announced GPM, a new software application that provides a secure, controlled framework for identifying, evaluating, measuring, and documenting tax positions. The first of its kind, Liquid Engines GPM integrates with a company’s existing tax provision processes to help companies more efficiently and accurately comply with the standards set forth in the recent FASB Interpretation No. 48 (FIN 48), the Financial Accounting Standards Board’s interpretation of FASB statement 109, Accounting for Uncertainty in Income Taxes. GPM is an extension of Liquid Engines’ powerful tax management software suite, which also includes STx and ITx, used today by a number of the largest multi-national corporations to manage state, local, and international tax matters.
Only months since the release of the Interpretation, companies are just now beginning to recognize the enormity of FIN 48 implementation. Intended to increase standardization and transparency in accounting for uncertain tax positions, FIN 48 compliance requires the establishment of processes and controls to develop a comprehensive inventory of existing tax positions and balances, difficult judgments to be made regarding the technical merits of these positions, and measurement of the appropriate tax benefit amount to be recognized in the financial statements. Also of note, is that the assessment of tax positions is a continuous process that does not end with the initial recognition. Under FIN 48, decisions regarding the technical merits and proper measurements must be reevaluated on a quarterly basis with each financial reporting cycle, thus requiring a controlled environment to capture and track ongoing analysis, approvals, and related documentation supporting decisions made throughout the process. FIN 48 also contains new and substantive financial statement disclosure requirements.
"The release of Interpretation 48 is yet another proof point that corporate tax departments will have to increase quite substantially the rigor and transparency of their procedures. Traditional methods of tax management simply don’t work in today’s world,” said Charles Rossotti, senior advisor at The Carlyle Group and former commissioner of the Internal Revenue Service. “One of the ways that tax executives can meet today’s more demanding requirements is do what other major business functions have done, which is to take more advantage of the power of technology to increase accuracy and transparency as well as operational efficiency. Liquid Engines’ new GPM application is an excellent example of a technology tool that tax executives can use to solve a pressing problem while also moving the efficiency of their departments to a higher level.”
“FIN 48 unquestionably puts an added burden on already resource-constrained corporate tax departments. The identification and reevaluation of tax positions requires a tremendous amount of work and is now an imperative to ensure that financial statements appropriately reflect tax expense and related liabilities,” said Deborah Lange, former senior vice president of tax, Oracle Corporation. “Software that provides a streamlined, controlled framework for identifying, evaluating, measuring, and reporting on uncertain tax positions — going well beyond what spreadsheet systems are capable of — is critically needed to help today’s corporate tax departments manage these new requirements."
Liquid Engines GPM Streamlines FIN 48 Compliance
Liquid Engines GPM provides a fully integrated application environment to manage, measure, and report on tax positions — across entities, jurisdictions, and periods — in accordance with FIN 48, SOX 404, and other accounting standards. Using the secure, controlled GPM framework, tax professionals are able to:
- Manage tax positions to comply with FIN 48 and other current standards
Designed to enhance existing provision processes, GPM helps improve the efficiency and accuracy of the tax reserves process by providing embedded workflow within an integrated view of your global tax positions, and by centrally tracking detailed information and related documentation about new tax positions and subsequent changes. The integrated application framework of GPM enables tax departments to create a best-practices model for managing tax positions — one that reduces manual intervention and helps ensure completeness in evaluation, adherence to company standards and controls, and consistency in decision making.
- Seamlessly measure the impact of change on tax reserves
GPM contains built-in business logic that automates the FIN 48 two-step recognition standard, tracks and calculates cumulative probability where applicable, defines proper balance sheet classification based on the nature and type of tax positions, and enables the automatic application of company-specific selection guidelines throughout the identification, review, and approval process. In addition, the application offers comprehensive accrual calculations for tax reserves, related interest and penalties, and the foreign exchange impact, and automatically rolls forward balances from period to period.
- Automatically calculate exposure amounts with integration to STx and ITx
Link GPM with Liquid Engines STx or ITx and you can leverage prebuilt models to quickly and easily analyze complex tax position scenarios, iteratively model changes, and immediately see the propagation of the changes across all relevant tax attributes, entities, jurisdictions, and years.
- Meet internal and external reporting requirements with improved control and consistency
Putting critical tax position data at your fingertips, GPM provides a suite of comprehensive reports to help manage the impact of changes in positions across periods and jurisdictions, satisfy audit requests, surface exceptions, as well as meet internal management reporting and external disclosure requirements.
Providing a framework to more efficiently and accurately manage tax positions and their impact on companies’ financial statements, GPM delivers the tools and visibility tax departments need to:
- Comply with current standards and improve accuracy and consistency in financial statement reporting from year to year
- Reduce risks commonly associated with complex tax judgments
- Increase the efficiency and effectiveness of the tax reserve process by building a best-practices model for decision making around tax positions
“At Liquid Engines, we are dedicated to building great software products that meet the complex and diverse needs of today’s corporate tax departments,” said Gwen Spertell, CEO of Liquid Engines. “With GPM, we continue this tradition by delivering a rich set of application capabilities that will not only help tax departments meet the immediate requirements of FIN 48, but will also empower them with the information and insight they need to drive a higher level of performance throughout the tax operation.”
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