Deferred Tax Liability — future tax owed because book basis exceeds tax basis. The most common operating cause is accelerated tax depreciation vs. straight-line book depreciation: DeltaDTL = (Tax Dep. - Book Dep.) × t. In M&A stock purchases, write-ups of PP&E and intangibles create a new DTL equal to Write-Up × t because the write-ups increase book basis without changing tax basis. The DTL increase is a non-cash add-back in CFO (the company paid less cash tax than the IS implies).