Square Enix 2004 Annual Report Download - page 63

SQUARE ENIX 2004 61
acquired company 675 — 6,392
Acturial (gain) loss (94) 19 (890)
Benefit paid (32) (4) (306)
Benefit obligation at end of year ¥983 ¥199 $9,308
Funded status (983) (199) (9,308)
Unrecognized actuarial loss (76) 19 (719)
Unrecognized FAS87 transition
obligation 24 26 228
Net amount recognized ¥(1,035) ¥(154) $(9,799)
Amount recognized in the balance sheet is:
Accrued pension costs (1,035) (154) (9,799)
Net amount recognized ¥(1,035) ¥(154) $(9,799)
Accumulated benefit obligation
at end of year ¥513 ¥141 $4,8566
Actuarial assumption:
Discount rate 1.611% 0.930% 1.611%
Assumed rate of increase in
compensation level 4.370% 2.730% 4.370%
The future benefit payments for the plan are expected as follows:
Thousands of U.S.
Millions of Yen Dollars
Year ending March 31,
2005 ¥65 $623
2006 70 669
2007 72 688
2008 71 674
2009 67 635
2010-2014 248 2,354
Retirement Benefit to Directors and Statutory Auditors
In order to prepare for the payment of retirement benefit to the
Company’s directors and statutory auditors in the future, the Company
internally funds a retirement allowance. The Board of Directors deter-
mined the certain formulae for calculation of retirement benefits, pursuant
to which, the benefits are calculated based on a certaion fixed amount mul-
tiplied by the number of years of office and the coefficient predetermined
by the Board according to the title of directors. The JCC requires share-
holders’ approval before it is paid, and the Company accrues retirement
allowance according to such formulae until the benefits are approved by
the shareholders for payment. The balance of ¥110 million and ¥136 mil-
lion in 2004 and 2003, respectively, is presented as "other long-term liabili-
ties" in the consolidated balance sheets. Charges to income for the direc-
tors’ and corporate auditors’ retirement plans were ¥6 million and ¥7 mil-
lion in 2004 and 2003, respectively.
14. INCOME TAXES
Domestic and foreign income (loss) before income taxes are as follows:
Millions of Yen Thousands of
Years Ended March 31 U.S. Dollars
2004 2003 2004
Domestic ¥4,577 ¥4,290 $43,309
Foreign 3,031 (45) 28,678
Total ¥7,608 ¥4,245 $71,987
Income tax expense is as follows:
Millions of Yen Thousands of
Years Ended March 31 U.S. Dollars
2004 2003 2004
Current: ¥3,600 ¥3,162 $34,065
Domestic 1,723 3,162 16,302
Foreign 1,877 — 17,763
Deferred: ¥(1,168) ¥(1,240) $(11,052)
Domestic (1,234) (1,240) (11,678)
Foreign 66 — 626
Total ¥2,432 ¥1,922 $23,013
The differences between the provision for income taxes and the income
taxes computed using Japan statutory tax rate to pretax income as a per-
centage of pretax income are as follows:
Years Ended March 31
2004 2003
Statutory tax rate (%) 42.05 42.05
Tax rate difference from foreign
consolidated affiliates (2.29) —
Effect of tax rate change (0.22) 0.57
Accumulated earnings tax — 1.86
Investment tax credit (2.19) —
Reversal of valuation allowance on
deferred tax assets (3.50) —
Others (1.88) 0.81
Income tax expense (%) 31.97 45.29
The components of the deferred tax assets and liabilities as of March 31,
2004 and 2003 consists of the following:
Thousands of
Millions of Yen U.S. Dollars
2004 2003 2004
Deferred tax assets:
Software development costs — ¥1,147 —
Accrued paid absence ¥108 72 $1,025
Accrued pension costs 416 58 3,942
Income tax payable 115 — 1,089
Prepaid expenses 205 — 1,941