Examples of Temporary Differences

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• Expenses or losses that deductible for tax purposes prior to being expensed in the the F/S.
  • Example: Accelerated depreciation on the tax return and straight-line on the books. The use of greater amounts of depreciation expense initially on the return compared to the book amounts.
  • Question: Which originates here? Future taxable amount? Future deductible amount? Liability? Asset?

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