Temporary differences result when the recognition of deductions for tax and accounting standards differ in their timing. The result is a gap between tax expense computed using income before tax and current tax payable computed using taxable income. This gap is known as deferred tax.
Differences that are temporary occur when there is a discrepancy in the recognition of deductions for tax and accounting standards, resulting in a gap between the tax expense calculated from pre-tax income and the current tax payable based on taxable income. This gap is referred to as deferred tax.