Epson 2010 Annual Report Download - page 60

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59
potential common shares outstanding during the years ended March 31, 2009 and 2010.
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, 2009 and 2010.
The significant components of deferred tax assets and liabilities as of March 31, 2009 and 2010, were as follows:
Thousands of
Millions of yen
U.S. dollars
March 31 March 31,
2009 2010 2010
Deferred tax assets:
Property, plant and equipment and intangible assets
(Impairment loss and excess of depreciation) ¥52,045 44,082 $473,796
Net operating tax loss carry-forwards 32,494 52,509 564,370
Inter-company profits on inventories and write downs 18,719 20,207 217,186
Provision for bonuses 3,925 4,146 44,561
Devaluation of investment securities 2,886 2,900 31,169
Provision for retirement benefits 3,360 6,331 68,046
Provision for product warranties 3,017 2,966 31,878
One-time depreciation for assets 1,060 1,808 19,432
Others 20,146 14,558 156,505
Gross deferred tax assets 137,656 149,510 1,606,943
Less: valuation allowance (113,436) (131,482) (1,413,177)
Total deferred tax assets 24,220 18,028 193,766
Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries and affiliates (9,582) (8,324) (89,466)
Net unrealized gains on land held by a subsidiary (2,613) (2,613) (28,084)
Valuation difference on available-for-sale securities (1,069) (1,683) (18,088)
Reserve for special depreciation for tax purpose (712) (344) (3,697)
Others (910) (1,493) (16,082)
Gross deferred tax liabilities (14,888) (14,459) (155,417)
Net deferred tax assets ¥9,331 ¥3,568 $38,349
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.