It's been a while since I've done any accounting, so I'm not even positive that my answer is correct, but I'll give it a go:

The thing that you should understand is that (in an inflationary economy) a dollar today is worth more than a dollar in a year from now. Therefore, you always want to save as much money now, rather than waiting a year or longer to save the money. The other thing to understand is that there are two types of depreciation going on: depreciation for books, and depreciation for tax purposes (MACRS).

Since Revenue-Expenses=Taxable Income, for tax purposes, I want my expenses to be as high as possible...this reduces my taxable income and therefore my tax liability. The government allows businesses to accelerate the depreciation on certain assets. Since a dollar today is worth more than a dollar tomorrow (and cash flows are crucially important to businesses), we always take the maximum amount of depreciation (for tax purposes) as soon as possible. If you look here, you can see the MACRS schedule for our 5 year asset (depreciates fully over 6 years -- year 1 and 6 are half years), you'll see that we are allowed to deduct 20% of the total cost of the asset in year 1.

So there's the back story. Keep in mind that there are 2 depreciation schedules: one for tax and one for books. The problem that Spongebobs_Grundle gave was to reconcile these.

$900 is the total that we will be depreciating over the life of the machine (initial cost - residual value). (This is for books)

900/10years = 90 dollars is the amount that we will list as "Depreciation Expense" in our financial statements (This is for books)

$1,000 x .20 = $200 is the maximum that we can deduct in year 1 for tax purposes. (This is for tax)

$200-$90=110 This is the difference between what our financial statements show and what our taxable income shows.

Remember that Revenue-Expenses=Taxable Income. Well in our case, our expenses were $110 higher than they show on our books. (BTW, this policy of letting people depreciate assets quickly was put in place by the government to encourage businesses to invest in fixed assets.) So what this means, is that we're paying less tax now than if we hadn't depreciated the asset using MACRS. How much less, you ask:

Given a tax rate of 35%: $110 x .35 = $38.50

So why is this a Deferred Tax Liability then? Well, remember that for tax purposes, we are depreciating the asset over 6 years. But for book purposes, we are depreciating it over 10 years. For years 7 - 10, our taxable income, and therefore tax expense, will be higher because we used MACRS. The Deferred Tax Liability is a placeholder on the balance sheet to show that eventually, we'll have to pay those taxes that we got to postpone in years 1 through 6.

edit: (Oh shit...you said briefly.)