Temporary Differences

Strategic Finance uses two accounts to represent temporary differences:

  • (v3110.00) Other Temporary Differences

  • (v3120.00) Temporary Differences

Other Temporary Differences (v3110.00) is an input in all periods.

In historical periods, Temporary Differences (v3120.00) is entered as a tax rate. The rate should be such that Deferred Provision for Income Taxes (v1160.00) divided by it equals the temporary differences in that period.

In forecast periods it is calculated as:

v3100.00 - v2190.01 + v3110.00

where:

v3100.00 Tax Depreciation

v2190.01 Depreciation Expense (Funds)

v3110.00 Other Temporary Differences.

If multiple temporary differences exist, you can subaccount Other Temporary Differences (v3110.00), so subaccounts represent a unique temporary difference. You can model each subaccount using a forecast method that best predicts what happens during the forecast periods.