The difference between the tax base of an asset or liability and its reported amount on the SFP is called a

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The difference between the tax base and reported amount on the SFP is called a temporary difference. This is because it is expected that the difference will reverse in the future and eventually result in the same amount for tax and financial reporting purposes. Temporary differences give rise to future income tax expenses or benefits. Permanent differences, in contrast, do not give rise to future income tax consequences. Current difference is not a commonly used accounting term.

The Difference Between the Tax Base of an Asset or Liability