Nikon 2006 Annual Report Download - page 43

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41
Deferred tax assets :
Write-down of inventories
Warranty reserve
Liability for employees’ retirement benefits
Depreciation and amortization
Net operating loss carryforwards
Accrued bonus
Other
Total
Deferred tax liabilities :
Deferred gains on sales of property to be replaced
Unrealized gain on available-for-sale securities
Undistributed earnings of foreign subsidiaries
Other
Total
Net deferred tax assets
Thousands of
U.S. Dollars
2006
$ 150,226
19,178
79,393
121,699
1,220
34,701
53,136
$ 459,553
52,240
141,984
38,519
4,967
$ 237,710
$ 221,843
2005
¥ 14,345
1,863
9,830
14,225
914
3,588
5,921
¥ 50,686
7,388
4,872
2,693
600
¥ 15,553
¥ 35,133
2006
¥ 17,647
2,253
9,326
14,296
143
4,076
6,242
¥ 53,983
6,137
16,679
4,525
583
¥ 27,924
¥ 26,059
Millions of Yen
A valuation allowance of ¥2,715 million ($23,110 thousand) in 2006 and ¥3,012 million in 2005 were deducted from the amounts
calculated above, respectively.
10. INCOME TAXES
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a
normal effective statutory tax rate of approximately 40.6% for the fiscal years ended March 31, 2006 and 2005.
The tax effects of significant temporary differences and loss carry-forwards which result in deferred tax assets and liabilities at March 31,
2006 and 2005, were as follows:
Year ended March 31,
A reconciliation between the normal effective statutory tax rate for the fiscal years ended March 31, 2006 and 2005, and the actual
effective tax rates reflected in the consolidated statements of income were as follows:
Normal statutory tax rate
Tax credit for research and development costs
Tax difference of consolidated subsidiaries
Tax exemption for foreign subsidiaries
Consolidated adjustment on unrealizable profits in inventories
Dividends from foreign subsidiaries not applicable to foreign tax credits
Increase in valuation allowance
Tax effect on retained earnings for foreign subsidiaries
Other-net
Actual effective tax rate
2005
40.6%
(5.7)
(11.1)
5.2
3.0
(4.2)
27.8%
2006
40.6%
(2.6)
(3.8)
(3.2)
(4.9)
4.5
(1.3)
29.3%
11. RESEARCH AND DEVELOPMENT COSTS
Research and development costs incurred were ¥37,139 million ($316,159 thousand) and ¥33,561 million for the fiscal years ended March 31,
2006 and 2005, respectively.