LG 2004 Annual Report Download - page 105

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LG Electronics Inc.
Notes to Non-Consolidated Financial Statements
December 31, 2004 and 2003
LG ELECTRONICS ANNUAL REPORT 2004
104
105
The income tax effects of temporary differences comprising the deferred income tax assets (liabilities) as of December 31, 2004 and
2003, are as follows:
The Company periodically assesses its ability to recover deferred income tax assets. In the event of a significant uncertainty
regarding the Company's ultimate ability to recover such assets, a valuation allowance is recorded to reduce the assets to its
estimated net realizable value. The statutory income tax rate, including resident tax surcharges, applicable to the Company was
approximately 29.7% in 2004 and 2003, and was amended to 27.5% effective for fiscal years beginning January 1, 2005, in accordance
with the Corporate Income Tax Law enacted in December 2003. Deferred income tax assets were computed by applying the present
tax rate of 29.7% for the temporary differences expected to be realized in 2004, and by applying the amended tax rate of 27.5% for the
temporary differences expected to be realized in fiscal years beginning January 1, 2005 and thereafter, except for 29.7% for certain
temporary differences expected to be filed as revision of the prior years’ tax return in 2005.
As a result of tax adjustments, effective tax rate of the Company for the year ended December 31, 2004 is approximately 16.9% (2003: 20.8%).
Depreciation
Allowance for doubtful accounts
Product warranty
Amortization of intangible assets
Equity method investment securities
Accrued expenses
Others
Deferred tax from temporary differences
Tax credit carried forward
Deferred income tax assets
(in millions of Korean won)
2004
(42,943)
21,658
40,056
(10,104)
(156,360)
108,978
55,581
16,866
87,899
104,765
2003
1,499
37,829
23,095
(21,470)
169,227
41,006
(1,458)
249,728
-
249,728