A company has a liability for employee entitlements (relating to long-service leave) with a carrying value of of $500,000, which will be deductible when the amounts are actually paid. The company also has accrued wages with a carrying value of $300,000 which have already been claimed as a deduction for tax purposes.

Required

1. Assuming the tax rate is 30%, what is the amount of the temporary difference?
2. Does this give rise to a deferred tax asset, or a deferred tax liability? What is the amount of the deferred tax asset/liability?