Brother International 2011 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2011 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 60

  • 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
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60

37
Brother Annual Report 2011
13. 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 40% for the years ended March 31, 2011 and 2010.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2011
and 2010 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2011 2010 2011
Deferred Tax Assets:
Inventory ¥ 8,399 ¥ 7,645 $ 101,193
Accrued bonuses 2,548 2,397 30,699
Accrued expenses 1,780 2,206 21,446
Allowance for doubtful accounts 8,105 10,461 97,651
Warranty reserve 1,597 1,553 19,241
Employees’ retirement benefits 1,340 1,276 16,145
Write-down of investment securities 3,910 4,444 47,108
Depreciation 3,285 6,169 39,578
Tax loss carryforwards 16,065 7,375 193,554
Other 5,038 6,312 60,698
Less valuation allowance (24,324) (26,074) (293,060)
Total deferred tax assets ¥ 27,743 ¥ 23,764 $ 334,253
Deferred Tax Liabilities:
Securities withdrawn from retirement benefit trust ¥ (3,262) ¥ (3,262) $ (39,301)
Prepaid pension cost (5,111) (5,446) (61,578)
Differences between book and tax bases of property, plant and equipment (2,381) (3,131) (28,687)
Undistributed earnings of foreign subsidiaries (3,458) (2,912) (41,663)
Unrealized gain on available-for-sale securities (863) (1,374) (10,398)
Deferred gain on derivatives under hedge accounting —(739) —
Other (750) (710) (9,036)
Total deferred tax liabilities ¥ (15,825) ¥ (17,574) $ (190,663)
Net deferred tax assets ¥ 11,918 ¥ 6,190 $ 143,590
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 years ended March 31, 2011 and 2010 were as follows:
2011 2010
Normal effective statutory tax rate 40.10% 40.50%
Expenses not deductible for income tax purposes 6.40 1.93
Revenues not recognized for income tax purposes (1.24) (0.84)
Lower income tax rates applicable to income in certain foreign countries (7.36) (10.30)
Tax credit for R&D expenses (4.10) (0.91)
Taxes on dividends from foreign subsidiaries (0.23) (0.15)
Net change in valuation allowance (10.32) (3.90)
Tax effect not recognized on retained earnings of foreign subsidiaries 1.76 —
Other – net (0.35) (0.87)
Actual e ective tax rate 24.66% 25.46%