Final answer:
Depreciable PPE creates a temporary difference due to the timing discrepancies in depreciation methods used for financial reporting and tax reporting. This difference will reverse over the asset's useful life.
Step-by-step explanation:
Depreciable property, plant, and equipment (PPE) is considered a temporary difference when it comes to tax accounting. A temporary difference arises when there is a discrepancy between the book value of the asset and its tax base. The difference results not from the ability to deduct the asset, but from the timing differences in how the depreciation expense is recognized for accounting and tax purposes. For example, companies may use different depreciation methods for financial reporting (like straight-line method) and tax reporting (such as an accelerated method), leading to temporary differences in the reported income. As the asset is depreciated over time, these differences will reverse, hence the characterization as temporary.