Square Enix 2005 Annual Report Download - page 37

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35
Annual Report 2005
4. Assumption used in accounting for retirement benefit
obligation
Periodic allocation method for
projected benefits Straight-line basis
Discount rate 1.652％
Years over which prior service costs
are amortized 1 year
Years over which net actuarial gains
and losses are amortized 1 year
Tax Effect Accounting
• FY2003 (April 1, 2003 to March 31, 2004)
1. Significant components of deferred tax assets and
liabilities are summarized as follows:
Millions of yen
Deferred tax assets
1) Current assets
Enterprise tax payable ¥0,115
Office tax payable 18
Accrues bonuses, allowance for bonuses
to employees 500
Advances paid 252
Accrued expenses 309
Allowance for sales return 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
2) Non-current assets
Non-deductible portion of allowance for
retirement benefits 392
Allowance for directors’ retirement benefits 53
Non-deductible depreciation expense of
property and equipment 684
Advance payments 552
Tax effect on deficit of subsidiaries 666
Loss on investments in securities 472
Other 91
Offset to deferred tax assets (non-current assets) (249)
Total 2,665
Net deferred tax assets 4,515
Deferred tax liabilities
Non-current liabilities
Net unrealized gains on other investment securities (249)
Offset to deferred tax assets (Non-current assets) 249
Total deferred tax liabilities —
Balance: Net deferred tax assets (liabilities) ¥4,515
2. Reconciliation of the statutory tax rate and the effective
tax rate
Statutory tax rate 42.05%
Permanent differences excluded from
non-taxable expenses 0.18
Permanent differences excluded from
gross revenue (0.18)
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 on 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%
• FY2004 (April 1, 2004 to March 31, 2005)
1. Significant components of deferred tax assets and
liabilities are summarized as follows:
Millions of yen
Deferred tax assets
1) Current assets
Enterprise tax payable ¥0,809
Office tax payable 19
Accrues bonuses, allowance for bonuses
to employees 415
Advances paid 310
Accrued expenses 346
Allowance for sales return 442
Non-deductible portion of allowance for
doubtful accounts 162
Tax credits 80
Non-deductible portion of allowance for
content production account (190)
Evaluation loss on content 1,140
Other (97)
Total 3,440
2) Non-current assets
Non-deductible portion of allowance for
retirement benefits 477
Allowance for directors’ retirement benefits 31
Non-deductible depreciation expense of
property and equipment 562
Tax effect on deficit of subsidiaries 690
Loss on investments in securities 242
Other 87
Offset to deferred tax assets (non-current assets) (324)
Total 1,768