Konica Minolta 2014 Annual Report Download - page 64

At March 31, 2014 and 2013, the signifi cant components of
deferred tax assets and liabilities in the consolidated fi nancial
statements are as follows:
Millions of yen
Thousands of
U.S. dollars
2014 2013 2014
Deferred tax assets:
Net operating tax losses
carried forward ....................... ¥ 35,192 ¥ 50,283 $ 341,935
Accrued retirement benefi ts .... —22,099 —
Net defi ned benefi t liability ...... 24,723 — 240,216
Tax effects related to
investments ........................... 8,907 1,866 86,543
Depreciation and amortization ... 4,558 4,323 44,287
Accrued bonuses ..................... 3,789 3,405 36,815
Write-down of assets ............... 3,768 3,460 36,611
Elimination of unrealized
intercompany profi ts .............. 3,069 3,009 29,819
Allowance for doubtful
accounts ................................. 1,143 966 11,106
Accrued enterprise taxes ......... 148 975 1,438
Other ........................................ 11,893 10,687 115,556
Gross deferred tax assets ........ 97,196 101,077 944,384
Valuation allowance .................. (18,442) (37,682) (179,188)
Total deferred tax assets .......... ¥ 78,753 ¥ 63,395 $ 765,187
Deferred tax liabilities:
Retained earnings of
foreign subsidiaries ................
(4,590) (3,226) (44,598)
Intangible assets recognized
in business combination ......... (2,834) (2,859) (27,536)
Unrealized gains on securities ... (2,371) (1,413) (23,037)
Gains on securities contributed
to employees’ retirement
benefi t trust ............................ (2,010) (2,083) (19,530)
Special tax-purpose reserve
for condensed booking of
fi xed assets ............................ (5) (15) (49)
Other ........................................ (3,890) (3,948) (37,796)
Total deferred tax liabilities....... ¥(15,703) ¥(13,546) $(152,575)
Net deferred tax assets ........... ¥ 63,050 ¥ 49,849 $ 612,612
Deferred tax liabilities related
to revaluation:
Deferred tax liabilities on
land revaluation ...................... ¥ (3,269) ¥ (3,269) $ (31,763)
Net deferred tax assets are included in the following items in the
consolidated balance sheets:
Millions of yen
Thousands of
U.S. dollars
2014 2013 2014
Current assets—
deferred tax assets ...................... ¥18,806 ¥20,259 $182,724
Fixed assets—deferred tax assets ... 48,040 33,000 466,770
Current liabilities—
other current liabilities ................. (836) (711) (8,123)
Long-term liabilities—
other long-term liabilities ............. (2,959) (2,699) (28,750)
Net deferred tax assets ................. ¥63,050 ¥49,849 $612,612
Adjustment of Deferred Tax Assets and Liabilities due to Changes in Corporate Tax Rates
In Japan, “the Act for Partial Revision of the Income Tax Act, etc. (Act No. 10 of 2014)”
was promulgated on March 31, 2014, and as such, Special Reconstruction Surtax will
not be imposed for fi scal years beginning on or after April 1, 2014. In addition, “the Act
of Local Corporate Tax (Act No. 11 of 2014)” was promulgated on March 31, 2014,
resulting in a newly imposed “Local Corporate tax” which lowers the corporate
residence tax rates for fi scal years beginning on or after October 1, 2014.
As a result, the statutory income tax rates used to calculate deferred taxes will be
reduced from 38.01% to 35.64% for temporary differences expected to be recovered
or settled in fi scal years beginning on or after April 1, 2014. In addition, the portion of
corporate taxes and the portion of residence taxes related to temporary differences
expected to be recovered or settled in fi scal years beginning on or after October 1,
2014, will change from 23.71% to 24.75%, and from 4.91% to 3.86%, respectively.
As a result of these changes, net deferred tax assets and unrealized gains or losses
on hedging derivatives, net of taxes as of March 31, 2014 decreased ¥2,139 million
($20,783 thousand) and ¥1 million ($10 thousand) ,and deferred income taxes for the
year ended March 31, 2014 increased ¥2,137 million ($20,764 thousand).
9. Business Combination
(Reorganization in the Group‘s management system)
The Company absorbed seven group companies, including
Konica Minolta Business Technologies, Inc. on April 1, 2013.
(1) Purpose of Business Combination
This reorganization of the Group’s management system will
further speed up various initiatives to increase corporate value
and is designed to achieve“innovative management capabilities
in the Business Technologies Business,” “strategic and agile
utilization of management resources,” and “systems to support
effi cient operation.”
(2) Legal Form of the Business Combination
(i) Method of absorption-type merger
An absorption-type merger was conducted with the Company as
the surviving entity and the seven group companies were
terminated.
(ii) Contents of allocations and contracts related to the
absorption-type merger
Because the seven Group companies are the Company’s wholly
owned subsidiaries, no issuance of new shares, capital increases,
or delivery of money resulted from the merger.
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KONICA MINOLTA, INC. Annual Report 2014