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14 INCOME TAXES
The effective tax rate reflected in the consolidated statement of operations for the year ended March 31, 2011 differs
from the statutory tax rate for the following reasons. For the year ended March 31, 2010, since loss before income
taxes was reported, the information on the reconciliation from statutory tax rate to effective tax rate is not provided in
accordance with the applicable provisions of Japanese GAAP.
For the year ended March 31 2011
Statutory tax rate 40.4%
Equity in net income of affiliated companies (31.8)
Valuation allowance 453.8
Dividend received from foreign subsidiaries eliminated in consolidation 9.1
Other 0.1
Effective tax rate 471.6%
Deferred tax assets and liabilities reflect the estimated tax effects of loss carryforwards and accumulated tempo-
rary differences between assets and liabilities for financial accounting purposes and those for tax purposes. The sig-
nificant components of deferred tax assets and liabilities as of March 31, 2011 and 2010 were as follows:
Millions of yen
Thousands of
U.S. dollars
As of March 31 2011 2010 2011
Deferred tax assets:
Allowance for doubtful receivables ¥     1,981  ¥  2,060 $      23,867 
Employees’ severance and retirement benefits 30,723  32,970 370,157 
Loss on impairment of long-lived assets 9,866  11,183 118,867 
Accrued bonuses and other reserves 27,797  25,316 334,904 
Inventory valuation 7,111  4,759 85,675 
Valuation loss on investment securities, etc. 1,182  1,202 14,241 
Net operating loss carryforwards 92,015  82,569 1,108,614 
Other 55,409  56,159 667,578 
Total gross deferred tax assets 226,084  216,218 2,723,904 
Less valuation allowance (123,598) (59,949) (1,489,133)
Total deferred tax assets 102,486  156,269 1,234,771 
Deferred tax liabilities:
Reserves under Special Taxation Measures Law (5,906) (6,225) (71,157)
Other (6,607) (2,477) (79,602)
Total deferred tax liabilities (12,513) (8,702) (150,759)
Net deferred tax assets ¥   89,973  ¥147,567 $ 1,084,012 
The net deferred tax assets are included in the following accounts in the consolidated balance sheet:
Millions of yen
Thousands of
U.S. dollars
As of March 31 2011 2010 2011
Current assets—Deferred taxes ¥58,307  ¥ 60,311 $ 702,494 
Investments and other assets—Deferred taxes 32,558  88,182 392,265 
Current liabilities—Other current liabilities (54) (71) (651)
Long-term liabilities—Other long-term liabilities (838) (855) (10,096)
Net deferred tax assets ¥89,973  ¥147,567 $1,084,012 
Mazda Annual Report 201 1 67