D-Link 2001 Annual Report Download - page 53

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21
D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(2) D-Link meets the requirements of a “scientific industry” as prescribed by the Statute for the
Establishment and Administration of the Science-based Industrial Park. Therefore, D-Link is entitled
to an income tax exemption on the profits generated from certain operations over a period of four or
five years. Such operations relate to the expanded operations accompanying the following capital
increases:
Duration of tax exemption
1996 capital increase March 1, 1996 ~ February 28, 2000
1997 capital increase January 1, 1997 ~ December 31, 2000
2000 capital increase January 1, 2001 ~ December,31,2004
The components of deferred income tax assets (liabilities) as of December 31, 2000 and 2001, are
summarized as follows:
2000 2001
Current:
Investment tax credits $ 31,461 48,284
Unrealized inter-company profits 55,619 99,978
Unrealized foreign currency exchange (gain) loss, net (17,970) 20,210
Inventory provisions 43,012 83,132
Allowance for doubtful accounts 28,608 55,072
Others 9,642 4,537
150,372 311,213
Less: valuation allowance (20,000) (125,433)
Net deferred income tax assets - current $ 130,372 185,780
Non-current:
Investment tax credits $ 136,328 244,710
Loss carryforward - 230,423
Accrued pension 14,725 23,155
Provision for loss on foreign investment - (27,409)
Investment (gain) loss on long-term equity
investments in foreign entities (20,570) 61,486
Foreign currency translation adjustment - (33,376)
Others 857 14,828
131,340 513,817
Less: valuation allowance (62,297) (462,285)
Net deferred income tax assets - non-current $ 69,043 51,532
Total deferred income tax assets $ 320,252 885,815
Total deferred income tax liabilities $ 38,540 60,785
Total valuation allowance for deferred income tax assets $ 82,297 587,718