Temporary difference

Differences between the carrying amount of an asset or liability and its tax base.

A temporary difference is the difference between the carrying amount of an asset or liability and its tax base, creating future taxable or deductible amounts.

- Used when computing taxes, preparing returns, and documenting tax positions.
- Used to evaluate transaction tax impact and ensure compliance (VAT/GST/Corporate Tax).

- Example: The tax team applies **Temporary difference** to determine the correct tax treatment and to support the filing.

- Why it matters: Reduces compliance risk, helps avoid penalties, and supports consistent tax reporting and defensible positions.