Temporary difference
AccountingA timing gap between when an item is recognised for accounting and for tax.
In plain terms
The thing deferred tax exists to account for. Permanent differences, by contrast, never reverse.
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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A timing gap between when an item is recognised for accounting and for tax.
The thing deferred tax exists to account for. Permanent differences, by contrast, never reverse.