We often encounter deferred tax asset and liability on the balance sheet as well as the current

Question:

We often encounter deferred tax asset and liability on the as well as the current and deferred portion of income tax expense on the income statement. Why is it important to understand the difference between an originating temporary difference and permanent difference in a company as related to deferred taxes? Explain if this concept is relevant for personal finance.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...