Fujitsu 2008 Annual Report Download - page 109

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FS applied the “corridor” approach to amortization of actuarial loss.
“Gain on termination of retirement benefit plan” was a termination gain resulting from a transfer of the retire-the retire-retire-
ment benefit plan provided by certain consolidated subsidiaries outside Japan to third-party organizations.
The assumptions used in accounting for the plans
At March 31 2007 2008
Discount rate Mainly 5.5% Mainly 6.9%
Expected rate of return on plan assets Mainly 7.0% Mainly 7.0%
Method of allocating actuarial loss
Straight-line method over the
employees' average remaining
service period
Straight-line method over the
employees' average remaining
service period
10. Income Taxes
The Group is subject to a number of different income taxes. The statutory tax rates in the aggregate in Japan were
approximately 40.6% for the years ended March 31, 2006, 2007 and 2008.
The components of income taxes are as follows:
Yen
(millions)
U.S. Dollars
(thousands)
Years ended March 31 2006 2007 2008 2008
Current ¥36,831 ¥44,104 ¥39,736 $397,360
Deferred 196 52,139 7,534 75,340
Income taxes ¥37,027 ¥96,243 ¥47,270 $472,700
The reconciliations between the applicable statutory income tax rate and the effective income tax rate for the
years ended March 31, 2006, 2007 and 2008 are as follows:
Years ended March 31 2006 2007 2008
Statutory income tax rate 40.6% 40.6% 40.6%
Increase (Decrease) in tax rate:
Valuation allowance for deferred tax assets (3.4%) 3.8% (9.4%)
Goodwill amortization 5.3% 3.1% 8.2%
Dividends from consolidated subsidiaries outside Japan 0.5% 1.9% 5.8%
Non-deductible expenses for tax purposes 2.3% 1.3% 4.4%
Tax effect on equity in earnings of affiliates, net 0.5% (1.3%) (3.4%)
Non-taxable income (0.8%) (0.4%) (1.6%)
Tax effect on prior losses on investments in
equity method affiliates
(9.4%)
—
—
Other (4.2%) (4.1%) (1.4%)
Effective income tax rate 31.4% 44.9% 43.2%
107
ANNUAL REPORT 2008FUJITSU LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS