Brother International 2013 Annual Report Download - page 45

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44
Notes to Consolidated Financial Statements
Brother Industries, Ltd. and Consolidated Subsidiaries
Year ended March 31, 2013 The assumptions used to measure fair value of 2013 Stock Option (directors)
Estimate method: Black-Scholes option pricing model
Volatility of stock price: 39.30%
Estimated remaining outstanding period: 11 years
Estimated dividend rate: 1.65%
Risk free interest rate: 0.68%
The assumptions used to measure fair value of 2013 Stock Option (executive officers)
Estimate method: Black-Scholes option pricing model
Volatility of stock price: 41.29%
Estimated remaining outstanding period: 8 years
Estimated dividend rate: 1.83%
Risk free interest rate: 0.39%
14. 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 rates of
approximately 38% for the year ended March 31, 2013, and 40% for the year ended March 31, 2012.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2013 and 2012, were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2013 2012 2013
Deferred Tax Assets:
Inventories ¥ 9,563 ¥ 7,844 $ 101,734
Accrued bonuses 2,227 2,301 23,691
Accrued expenses 1,880 1,498 20,000
Allowance for doubtful accounts 6,516 6,755 69,319
Warranty reserve 807 895 8,585
Employees’ retirement benefits 1,235 942 13,138
Write-down of investment securities 4,171 3,039 44,372
Depreciation 2,991 2,862 31,819
Tax loss carryforwards 13,161 13,945 140,011
Other 4,925 4,836 52,394
Less valuation allowance (26,350) (24,148) (280,319)
Total deferred tax assets ¥ 21,126 ¥ 20,769 $ 224,744
Deferred Tax Liabilities:
Securities withdrawn from retirement benefit trust ¥ (2,845) ¥ (2,845) $ (30,266)
Prepaid pension cost (3,852) (4,215) (40,979)
Differences between book and tax bases of property, plant and equipment (1,750) (1,909) (18,617)
Undistributed earnings of foreign subsidiaries (4,308) (3,964) (45,830)
Unrealized gain on available-for-sale securities (1,517) (758) (16,138)
Other (1,331) (851) (14,159)
Total deferred tax liabilities ¥ (15,603) ¥ (14,542) $ (165,989)
Net deferred tax assets ¥ 5,523 ¥ 6,227 $ 58,755