18.2 Additional Considerations LEARNING OBJECTIVE 2 Identify additional issues in accounting for income taxes. Specific Differences Numerous items create differences between pretax financial income and taxable income. For purposes of accounting recognition, these differences are (1) temporary and (2) permanent. Temporary Differences Taxable temporary differences are temporary differences that will result in taxable amounts in future years when the related assets are recovered. Deductible temporary differences are temporary differences that will result in deductible amounts in future years, when the related book liabilities are settled. As discussed earlier, taxable temporary differences give rise to recording deferred tax liabilities. Deductible temporary differences give rise to recording deferred tax assets. Illustration 18.20 provides examples of temporary differences