Bloomberg Industry Group has acquired Tax Prodigy’s software, which calculates income tax related elements of financial statements. The product will be folded into Bloomberg Tax & Accounting’s offerings, and four members of Tax Prodigy will join Bloomberg to manage the new software.
Tax Prodigy’s income tax-provisioning software helps organizations comply with the technical accounting requirements for income taxes under U.S. GAAP. These requirements include a calculation of the effective income tax rate along with calculations of the amounts payable to tax authorities.
Because the corporate income tax rate is 21% in the U.S., as set in the Tax Cuts and Jobs Act, it is a highly scrutinized component of corporations’ financial statements.
“The income tax provision is an area of high and significant complexity,” said Adam Schrom, senior manager of Bloomberg Tax & Accounting’s team of subject matter experts. “Because it’s so highly scrutinized, lots of effort goes into computing that one line item. There are sometimes entire groups within tax departments dedicated to computing those numbers, as it can have a significant impact on earnings. Tax Prodigy was interesting to us because of its ability to provide control, but is also quick to implement, and fast and simple to use.”
Schrom added that because other products on the market can be unwieldy to implement and use, often corporate tax departments resort to calculating the income tax provision in Microsoft Excel because they need to get it done as quickly as possible.
“Tax Prodigy is a natural addition to our suite of products,” he added. “We believe customers will benefit from this addition to our core, as the income tax provision process has a lot of opportunity.”
Lisa Fitzpatrick, president of Bloomberg Tax & Accounting, said the product is unique in the market. "It is easy to implement and simplifies the tax provision calculation process with a high degree of accuracy and control,” she said in a statement.
“On behalf of Tax Prodigy’s founders and owners, we are excited to be part of Bloomberg Tax & Accounting, a brand that we greatly admire for the quality of their products,” added David Kovar, CEO of Tax Prodigy, in a statement. “There are excellent synergies between Tax Prodigy and the Bloomberg Tax & Accounting research and software solutions. We’re looking forward to the opportunity to enhance our product and contribute to the development of new solutions across the broader product line.”
Tax Prodigy Provision joins Bloomberg Tax & Accounting’s suite of planning and compliance solutions for corporations, including Bloomberg Tax Research, Fixed Assets, Corporate Tax Analyzer, and State Tax Analyzer.
Financial terms of the acquisition were not disclosed.
