Permanent Difference
/ˈpɜːrmənənt ˈdɪfrəns/
Definitions
- (n.) A discrepancy between taxable income and accounting income that will not reverse over time, affecting financial reporting and tax expense permanently.
The company identified a permanent difference arising from non-deductible fines in its tax reconciliation.
Forms
- permanent difference
- permanent differences
Related terms
See also
Commentary
Permanent differences are important for accurate tax expense reporting as they do not lead to deferred tax assets or liabilities, unlike temporary differences.
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.