Brother International 2008 Annual Report Download - page 34

Download and view the complete annual report

Please find page 34 of the 2008 Brother International annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 48

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48

32 Brother Annual Report 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Brother Industries, Ltd. and Consolidated Subsidiaries
For the Years ended March 31, 2008 and 2007
10. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the
aggregate, resulted in normal effective statutory tax rate of approximately 41% for the years ended March 31, 2008 and
2007.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets
and liabilities at March 31, 2008 and 2007 were as follows:
Thousands of
Millions of Yen U.S. Dollars
2008 2007 2008
Deferred Tax Assets:
Inventory ¥ 8,724 ¥ 7,659 $ 87,240
Accrued bonuses 2,292 2,087 22,920
Accrued expenses 2,855 4,576 28,550
Allowance for doubtful accounts 7,048 6,995 70,480
Warranty reserve 1,427 1,730 14,270
Employees’ retirement benefits 1,226 1,133 12,260
Write-down of investment securities 2,368 3,316 23,680
Depreciation 3,498 4,004 34,980
Tax loss carryforwards 1,208 941 12,080
Deferred loss on derivatives under hedge accounting — 1,253 —
Other 3,467 4,649 34,670
Less valuation allowance (8,615) (6,889) (86,150)
Total deferred tax assets 25,498 31,454 254,980
Deferred Tax Liabilities:
Securities withdrawn from retirement benefit trust (3,262) (3,262) (32,620)
Prepaid pension cost (4,051) (3,644) (40,510)
Differences between book and tax bases of property, plant and equipment (1,871) (1,674) (18,710)
Undistributed earnings of foreign subsidiaries (6,272) (5,105) (62,720)
Unrealized gain on available-for-securities (724) (3,140) (7,240)
Deferred gain on derivatives under hedge accounting (619) —(6,190)
Other (666) (688) (6,660)
Total deferred tax liabilities (17,465) (17,513) (174,650)
Net deferred tax assets ¥ 8,033 ¥ 13,941 $ 80,330
Deferred Tax Assets for land revaluation ¥ —¥ 0 $ —
A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated
statements of income for the year ended March 31, 2008 was not disclosed because the difference was not material.
A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consoli-
dated statements of income for the year ended March 31, 2007 was as follows:
2007
Normal effective statutory tax rate 40.50%
Expenses not deductible for income tax purposes 1.12
Revenues not recognized for income tax purposes (1.35)
Lower income tax rates applicable to income in certain foreign countries (2.98)
Tax credit for R&D expenses (2.59)
Taxes on dividends from foreign subsidiaries 0.79
Other – net 1.38
Actual effective tax rate 36.87%