How does cold temperature affect indicated altitude?

7-3-1. Effect of Cold Temperature on Barometric Altimeters
a. Temperature has an effect on the accuracy of barometric altimeters, indicated altitude, and true altitude. The
standard temperature at sea level is 15 degrees Celsius (59 degrees Fahrenheit). The temperature gradient from
sea level is minus 2 degrees Celsius (3.6 degrees Fahrenheit) per 1,000 feet. For example, at 5000 feet above sea
level, the ambient temperature on a standard day would be 5 degrees Celsius. When the ambient (at altitude)
temperature is colder than standard, the aircraft's true altitude is lower than the indicated barometric altitude.
When the ambient temperature is warmer than the standard day, the aircraft's true altitude is higher than the
indicated barometric altitude.
b. TBL 7-3-1 indicates how much error may exist when operating in non-standard cold temperatures. To use
the table, find the reported temperature in the left column, and read across the top row to locate the height above
the airport (subtract the airport elevation from the flight altitude). Find the intersection of the temperature row
and height above airport column. This number represents how far the aircraft may be below the indicated altitude
due to possible cold temperature induced error.
TBL 7-3-1
ICAO Cold Temperature Error Table