Square Enix 2004 Annual Report Download - page 41

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SQUARE ENIX 2004 39
Fiscal year under review (April 1, 2003 to March 31, 2004)
The Company
1. Principal deferred tax assets and liabilities were as follows:
Millions of Yen
Deferred tax assets
①Current assets
Enterprise tax payable 115
Office tax payable 18
Accrued bonuses, allowances for bonuses to employees 500
Advances paid 252
Accrued expenses 309
Allowance for sales returns 466
Prepaid expenses 205
Non-deductible portion of allowance for
doubtful accounts 86
Tax credits 118
Non-deductible portion of allowance for content
production account (258)
Other 35
Total 1,850
②Non-current assets
Non-deductible portion of allowance for retirement benefits 392
Allowance for directors’retirement benefits 53
Non-deductible depreciation expense of property,
plant and equipment 684
Advances paid 552
Tax effect on deficit of subsidiaries 666
Loss on investments in securities 472
Other 91
Offset to deferred tax liabilities (non-current) (249)
Total 2,665
Total deferred tax assets 4,515
Deferred tax liabilities
Non-current liabilities
Net unrealized gains on available-for-sale securities (249)
Offset to deferred tax assets (non-current fixed) 249
Total deferred tax liabilities —
Net deferred tax assets (liabilities) 4,515
2. Reconciliation between statutory tax rate and effective tax Statutory tax
rate
Statutory tax rate 42.05%
Permanent differences excluded from nontaxable
expenses (e.g., entertainment expenses) 0.18%
Permanent differences excluded from gross revenue
(e.g., dividends received) (0.18%)
Increase/decrease in valuation allowance (3.18%)
Taxation on per capita basis for residents tax 0.07%
Foreign tax credits (0.33%)
Special income tax credits (0.95%)
Investment loss on equity method 1.76%
Tax effect on related companies’ unappropriated
retained earnings (1.36%)
Amortization of consolidation adjustment account 0.34%
Adjustments in unrealized profits due to consolidation (1.00%)
Difference in tax rate with the parent company 0.01%
Other (0.15%)
Effective tax rate 37.26%
3. —