Mazda 2008 Annual Report Download - page 80

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Pension adjustments recognized by an overseas consolidated subsidiary
Commencing in the year ended March 31, 2007, a consolidated subsidiary in the United States adopted the
Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans. The amount (net of tax) that the consolidated subsidiary recognized, in the balance sheet, as a
component of the other accumulated comprehensive income in the equity is recognized, in the consolidated balance
sheet, as “pension adjustments recognized by an overseas consolidated subsidiary” as a separate component of the
valuation and translation adjustments of the equity.
Accounting for uncertainty in income taxes
Commencing in the year ended March 31, 2008, the consolidated subsidiary in the United States adopted the FASB
Interpretation No.48 (“FIN 48”), Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement
No. 109, and made a cumulative effect adjustment to the opening balance of retained earnings. In the consolidated
financial statements, the cumulative effect was recognized as a reduction in retained earnings in the consolidated
statement of equity for the year ended March 31, 2008.
12. OTHER INCOME (EXPENSES)
The components of “Other, net” in Other income (expenses) in the statements of income for the years ended March
31, 2008, 2007 and 2006 were comprised as follows:
Thousands of
Millions of yen U.S. dollars
For the years ended March 31 2008 2007 2006 2008
Gain/(loss) on sale of investment securities, net ¥ 27 ¥ (16) ¥ 1,407 $ 270
Loss on sale of property, plant and equipment, net (3,030) (3,380) (6,433) (30,300)
Rental income 1,989 1,764 1,926 19,890
Gain on the transfer to the government of the substitutional
portion of employee pension fund liabilities — — 59,611 —
Loss on impairment of fixed assets (2,196) (3,356) (36,650) (21,960)
Foreign exchange loss (7,544) (19,914) (19,088) (75,440)
Compensation received for the exercise of eminent domain 122 — 472 1,220
Gain on retroactive correction of fixed assets 1,330 — — 13,300
Insurance claim income — — 996 —
Adoption of revised accounting standard for leases (1,144) — — (11,440)
Inventory valuation loss related to car-carrying vessel accident — (1,979) — —
Other (2,713) (5,975) (7,881) (27,130)
¥(13,159) ¥(32,856) ¥(5,640) $(131,590)
13. INCOME TAXES
The effective tax rates reflected in the consolidated statements of income differ from the statutory tax rate for the
following reasons.
For the years ended March 31 2008 2007 2006
Statutory tax rate 40.4% 40.4% 40.4%
Equity in net income of unconsolidated subsidiaries and affiliated companies (2.4) (2.1) (3.1)
Valuation allowances (1.7) (2.1) 1.0
Unrealized profits from intercompany transactions — — (6.6)
Prior year income taxes 2.1 2.8 8.7
Tax credit (3.3) (3.8) —
Other 0.2 1.1 1.4
Effective tax rate 35.3% 36.3% 41.8%
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