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diferencias permanentes

Discussion in 'Financial Terms' started by margaritainny, Aug 4, 2008.

  1. margaritainny Junior Member

    Tokyo, Japan
    Japanese
    Hola a todos,

    I am copying my previous question since someone suggested me to place my question under this sub-forum.

    I am having difficulty in understanding what "las diferencias permanentes" means. It comes under the section of "Impuesto sobre Beneficios" and the entire phrase is as follows:

    "El impuesto sobre Sociedades es un gasto del ejercicio que se calcula sobre el resultado ecónomico antes de impuesto, modificado por las diferencias permanentes... "

    No tengo ninún conocimiento en contabilidad, así que cualquier comentario sería de gran ayuda.

    Gracias!
     
  2. jcwoos Senior Member

    english
    This is tough if you don't know accounting. Permanent differences and timing differences refer to income and expense items that are different for financial reporting and tax purposes. It is easier to start with timing differences. Probably the most important timing difference is depreciation expense where different depreciation methods are used for tax and book purposes so year by year you get a different depreciation expense for the two purposes but in the end you are going to depreciate the whole asset so whatever differences existed during its life will zero out and you get the same answer in the end either way.

    Permanent differences do not reverse, they are the result of a provision in tax law that is different than the accounting principal that would apply for financial reporting purposes. In the U. S., reimbursement to employees for meals consumed as entertainment expenses are only 50% deductible. On the financial statements, you would deduct the entire cost of such meals but in the tax return only the allowable portion so the effective tax rate (actual tax expense/book net income) would appear to be higher than the statutory rate as a result of this permanent difference. While there are plenty of examples of permanent expense differences in the U. S., in Latin America they are far more widespread, generally referred to as "no deducibles".

    That is probably more than you wanted to know.
     
  3. margaritainny Junior Member

    Tokyo, Japan
    Japanese
    Wow, this is indeed more than what I expected. Thank you so much for the detailed explanation! Best answer I've received in this forum so far :thumbsup:
     

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