Working with Permanent and Temporary Differences

Permanent and temporary differences are categorized into two categories to account for the differences between GAAP and Statutory reporting requirements of entities:

• GAAP to Statutory adjustments—Legal entities for which the local tax regulations require a different basis of accounting from those of the parent use GAAP to Stat adjustments.
• Statutory to Tax adjustments—Entities that do not use or do not have GAAP to Statutory permanent or temporary differences, and for which reporting standards and local tax regulations are the same use the Statutory to Tax permanent and temporary differences sections.

Note:

Temporary differences are classified as noncurrent for Balance Sheet purposes.

See the following sections:

• Permanent Differences
• Working with Temporary Differences
• Entering National Temporary Differences

Watch this video to learn more about configuring Permanent Differences: Configuring Permanent Differences in Tax Reporting Cloud.

For more information on classifying accounts based on Tax Type, Tax Data Type, and FBOS attributes, see Defining Account Tax Attributes in Administering Tax Reporting.