The difference between taxes that would be due (paid) using straight-line depreciation and that actually paid using accelerated depreciation for tax purposes and other temporary differences in the recognition of revenue and expense items for income tax purposes and for financial reporting purposes. When determining a utility's cost of service an allowance is granted for income taxes that is computed using straight-line depreciation. When a utility is using accelerated depreciation for tax purposes this results in the utility receiving greater allowance for taxes than the actual taxes paid in initial years of an asset, and a lower allowance for taxes than actual taxes paid in later years of the asset. The Commission treats such excess income (in initial years) as a return-of-capital, similar to depreciation, and requires the utility to reduce its rate base by the amount of excess income (the deferred taxes). This reduces its profit (return-on-capital) in subsequent years. When the situation is reached in later years where taxes paid exceed the allowance for taxes in the cost of service the Commission allows the rate base to be increased by the amount of the shortfall in income (i.e., the negative deferred taxes). This treatment results in the utility only receiving its allowed rate of return on equity investment over the life of the property and flows the benefit from deferring taxes through to the ratepayer. See SOUTH GEORGIA METHOD and REVERSE SOUTH GEORGIA.