Software Testing Interview Tips : Defect Severity and Priority

Severity refers to the impact or consequence of the bug.
Priority indicates when your company want the bug to be fixed.

Severity doesn't change unless you learn more about hidden consequences. Priorities change as a project progresses. Generally , more severe problems are higher priority to fix, and minor and cosmetic problems are low priority. However they are not the same. Severe problems may not be worth fixing - for example, suppose that you find a bug that will corrupt any new record that is created before December 1999. This would have been a high priority bug a couple of years ago (when December 1999 was still a date in the future), its still serious, but many companies would no longer fix it.

On the other hand, a start up splash screen with your company logo backwards and the name misspelled is purely a cosmetic problem. However, most companies would treat it as a high priority bug and fix it before releasing the product.