Temporary Difference
/ˈtɛmpərɛri ˈdɪfərəns/
Definitions
- (n.) A discrepancy between the tax basis of an asset or liability and its reported amount in financial statements that will result in taxable or deductible amounts in future periods.
The company recorded a temporary difference arising from depreciation methods used for tax and accounting purposes.
Forms
- temporary difference
- temporary differences
Related terms
See also
Commentary
Temporary differences are central in accounting for income taxes and require careful distinction from permanent differences to correctly measure deferred tax assets and liabilities.
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