What is permanent difference in SAP (FI - Financial Accounting)?

SAP Term: permanent difference

• Component: FI

• Component Name: Financial Accounting

• Description: The difference between the accounting profit and taxable profit, which arises in the current reporting period and is not subject to change in the subsequent reporting periods. The difference is the result of the different methods used to determine expenses and incomes for accounting and taxation purposes. This term is only relevant for the Russian Federation and Ukraine.

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• Key Concepts: 
  Permanent difference is a term used in SAP Financial Accounting (FI) to describe the difference between the taxable income and the accounting income. This difference is caused by the fact that certain items are not allowed to be deducted from the taxable income, such as depreciation or amortization. The permanent difference is not allowed to be carried forward to future years and must be reported in the current year. 
  
  How to use it: 
  In SAP FI, permanent differences are recorded in the tax return and reported in the financial statements. The permanent difference is calculated by subtracting the taxable income from the accounting income. This calculation can be done manually or automatically using SAP FI. 
  
  Tips & Tricks: 
  When calculating permanent differences, it is important to remember that certain items are not allowed to be deducted from the taxable income, such as depreciation or amortization. It is also important to remember that the permanent difference cannot be carried forward to future years and must be reported in the current year. 
  
  Related Information: 
  Permanent differences are related to other terms such as deferred taxes and temporary differences. Deferred taxes are taxes that have been paid but not yet recognized in the financial statements, while temporary differences are differences between accounting income and taxable income that can be carried forward to future years.