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69
NIKON REPORT 2016
Millions of Yen
Thousands of
U.S. Dollars
2015 2016 2016
Deferred tax liabilities:
Reserve for advanced depreciation of non-current assets ¥ 4,566 ¥ 4,621 $ 41,011
Unrealized gain on available-for-sale securities 8,792 4,737 42,036
Undistributed earnings of foreign subsidiaries 11,172 11,236 99,712
Other 3,027 6,130 54,405
Total ¥27,557 ¥26,724 $237,164
Net deferred tax assets ¥36,000 ¥35,832 $318,002
A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reected in the accompanying consolidated
statement of income for the year ended March 31, 2016, with the corresponding gures for 2015, is as follows:
2015 2016
Normal effective statutory tax rate 35.6% 33.1%
Tax credit for research and development costs (3.9) (2.1)
Tax rate difference of consolidated subsidiaries (8.5) (11.1)
Deferred tax assets for unrealizable prots (0.3) 4.8
Increase in valuation allowance 13.6 6.5
Tax effect on retained earnings for foreign subsidiaries 4.3 0.2
Tax exemption for foreign subsidiaries (4.7) (8.0)
Amortization of goodwill 0.7 2.4
Effect of corporate income tax rate reduction in Japan 8.0 4.5
Other—net 2.8 3.3
Actual effective tax rate 47.6% 33.6%
Pursuant to “Partial Revision of Income Tax Act” (Act No. 15 of 2016) and “Partial Revision of Local Tax Act” (Act No. 13 of 2016), which were
enacted in the Diet session on March 29, 2016, reductions in corporate tax rates, etc. are applicable from the scal years starting on and after
April 1, 2016. In accordance with this revision, the effective tax rate, applied to the calculation of deferred tax assets and deferred tax liabilities
(for the temporary differences to be settled on and after April 1, 2016), is changed from 32.3% to 30.9% for temporary differences that are
expected to be settled during the consolidated scal year starting April 1, 2016 and during the scal year starting April 1, 2017 and 30.6% for
those expected to be settled in the consolidated scal years starting April 1, 2018, henceforth.
In accordance with the changes above, deferred tax assets (the net amount including deferred tax liabilities) decreased ¥1,205 million
($10,693 thousand), while income tax-deferred increased ¥1,513 million ($13,425 thousand).
13. Research and Development Costs
Research and development costs charged to income were ¥66,730 million and ¥66,781 million ($592,659 thousand) for the years ended
March 31, 2015 and 2016, respectively.
14. Leases
The Group leases certain machinery and equipment for manufacturing.
The minimum rental commitments under non-cancelable operating leases at March 31, 2015 and 2016 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2015 2016 2016
Due within one year ¥3,615 ¥3,743 $33,221
Due after one year 3,697 3,858 34,240
Total ¥7,312 ¥7,601 $67,461
Notes to Consolidated Financial Statements
FINANCIAL AND CORPORATE DATA