Examples of Temporary Differences

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• 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?

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