[Verse 1] When accounting rules and tax codes don't align There's a timing gap that draws a different line Book income shows one thing, tax returns another These temporary differences we need to discover Assets get recorded when we pay too much in tax Future benefits coming, that's an accounting fact [Chorus] Deferred tax assets when we pay ahead Future deductions, tax relief we'll get instead Deferred tax liabilities when we delay Tomorrow's taxes that we'll have to pay Timing differences create these balancing acts Assets and liabilities, deferred tax facts [Verse 2] Bad debt provisions, warranty costs we estimate Book expense today but tax waits for a later date Depreciation methods can speed up or slow down Straight line for books, accelerated wears the crown When tax depreciation moves faster than the books A liability appears in our financial looks [Chorus] Deferred tax assets when we pay ahead Future deductions, tax relief we'll get instead Deferred tax liabilities when we delay Tomorrow's taxes that we'll have to pay Timing differences create these balancing acts Assets and liabilities, deferred tax facts [Bridge] Balance sheet positions from these timing games Temporary differences with permanent names Book basis versus tax basis shows the spread Calculate the future, look ahead instead [Verse 3] Revenue recognition can create the gap Installment sales or cash basis sets the trap When book revenue comes before the tax is due A liability emerges in our balance view These items will reverse as time goes by The differences will even out, that's why [Chorus] Deferred tax assets when we pay ahead Future deductions, tax relief we'll get instead Deferred tax liabilities when we delay Tomorrow's taxes that we'll have to pay Timing differences create these balancing acts Assets and liabilities, deferred tax facts [Outro] Remember the rule for keeping track Assets reduce future tax impact Liabilities increase what's owed tomorrow From timing differences we borrow
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