Misconception · MIS:permanent-difference-creates-deferred-tax

Mistaken idea “A permanent difference creates a deferred tax balance”

Mistaken reasoning: This mistake mistakes rate effects for future reversal.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

A permanent difference affects the current bridge and rate reconciliation but has no future reversal.

Where to watch

When this mistake may appear

  • A permanent item changes the effective rate.
Check your work

Your work may contain this mistake if:

  • Record a deferred tax asset or liability for the permanent item.