Deductible Temporary Difference
Definitions
- (n.) A temporary difference that will result in deductible amounts in future periods when the carrying amount of an asset or liability is recovered or settled, affecting deferred tax calculations.
The accountant identified a deductible temporary difference caused by warranty liabilities that will reduce taxable income in future years.
Forms
- deductible temporary difference
Related terms
See also
Commentary
This term is central in accounting for income taxes under IFRS and US GAAP; understanding the timing of deductible differences assists in properly recognizing deferred tax assets.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.