Examples of Temporary Differences
Deferred tax liabilities and assets still present as well as temporary differences.
Examples of temporary differences (see text also).
- Revenues or gains that are taxable after they are reported in the financial statements (F/S).
- Example: Gross profit on installment sales reported on the financial statements when the sale occurs, later on the tax return when the proceeds are received.
- Question: Which originates here? Future taxable amount? Future deductible amount? Liability? Asset?