Net operating losses generally create permanent book-tax differences.
NOLs are treated as deductible temporary differences.

Question

Quizplus · Accepted Answer

Net operating losses create temporary book-tax differences because they decrease taxable income in one year but can be carried over to future years to offset future taxable income. Eventually, when the NOL is fully utilized, there will be no more book-tax difference.

Net Operating Losses Generally Create Permanent Book-Tax Differences