Examples of Temporary Differences
- Expenses or losses that are deductible for tax purposes after being expensed in the F/S.
- Example: Contingencies. (Remember the criteria for the accrual of contingencies?) Losses anticipated and expensed in the financial statements. Not tax deductible until actually settled later.
- Question: Which originates here? Future taxable amount? Future deductible amount? Liability? Asset?