Final answer:
The temporary differences that are deductible after they are recognized in financial income are advance rental receipts, product warranty liabilities, and fines and expenses resulting from a violation of the law.
Therefore, the correct options are:
1) Advance rental receipts.
2) Product warranty liabilities.
4) Fines and expenses resulting from a violation of law.
Step-by-step explanation:
Financial Income is the revenue generated by the temporary surplus cash invested in short-term investments and Marketable securities.
The temporary differences that are normally classified as expenses or losses and are deductible after they are recognized in financial income include:
- Advance rental receipts: When a company receives advance rental payments, they are initially recorded as a liability. However, when the rent is actually earned over time, it is recognized as rental income, resulting in a deductible expense.
- Product warranty liabilities: When a company provides warranties on its products, it creates a liability for potential future warranty costs. When the company incurs actual warranty expenses, they become deductible since they are recognized in financial income.
- Fines and expenses resulting from a violation of law: If a company incurs fines or expenses due to a violation of the law and those expenses are recognized in financial income, they can be classified as deductible expenses.
Depreciable property, however, is not a temporary difference but rather a permanent difference, as it represents the difference between the tax basis and the book basis of an asset and affects the timing of tax deductions.