How does accounting for permanent differences less complex than is accounting for temporary differences?
How does accounting for permanent differences less complex than is accounting for temporary differences?
Temporary Difference:
A temporary difference is the difference of an income recognized under the tax rules and the accounting rules followed by the company in different trading periods. Moreover, the difference between the amount of assets and liabilities that are reported in the financial reports and the amount of assets and liabilities as per the company’s tax records are referred to as a temporary difference.
Permanent Difference:
A permanent difference is when it is caused by the transactions and events that exists under the law which will not affect the taxable income or taxes payable. This difference will never be eliminated.
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