Epson 2009 Annual Report Download - page 67

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66
incurred and Epson had no dilutive potential common shares outstanding during the year ended March 31,
2009.
13. Income taxes
Epson is subject to a number of different income taxes that amounted to a statutory income tax rate in
Japan of approximately 40.4 % for each of the years ended March 31, 2008 and 2009.
The significant components of deferred tax assets and liabilities at March 31, 2008 and 2009, were as
follows:
Millions of yen
Thousands of
U.S. dollars
March 31 March 31,
2008 2009 2009
Deferred tax assets:
Property, plant and equipment and intangible assets
(Impairment loss and excess of depreciation) ¥26,682 ¥52,045 $529,827
Net operating tax loss carry-forwards 18,262 32,494 330,795
Inter-company profits on inventories and write downs 8,776 18,719 190,562
Provision for bonuses 7,358 3,925 39,957
Devaluation of investment securities 5,072 2,886 29,380
Provision for retirement benefits 4,455 3,360 34,205
Provision for product warranties 3,510 3,017 30,713
Provision for loss on litigation 1,320 3,340 34,001
One-time depreciation for assets 1,224 1,060 10,791
Others 19,240 16,805 171,133
Gross deferred tax assets 95,903 137,656 1,401,364
Less: valuation allowance (29,492) (113,436) (1,154,800)
Total deferred tax assets 66,410 24,220 246,564
Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries (32,478) (9,582) (97,546)
Net unrealized gains on land held by a subsidiary (2,613) (2,613) (26,600)
Valuation difference on available-for-sale securities (1,510) (1,069) (10,882)
Reserve for special depreciation for tax purpose (1,435) (712) (7,248)
Others (1,778) (910) (9,297)
Gross deferred tax liabilities (39,816) (14,888) (151,573)
Net deferred tax assets ¥26,593 ¥9,331 $94,991
The valuation allowance was established mainly against deferred tax assets on future tax-deductible
temporary differences and operating tax loss carry-forwards as it is probable that these deferred tax assets
will not be realized within the foreseeable future.