Square Enix 2008 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2008 Square Enix annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 58

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58

4. Method of estimating the number of vested stock options
Owing to the difficulty of estimating the number of stock options
that will be forfeited in future periods, estimation of the vested
number is based upon actual forfeitures in prior periods.
Tax Effect Accounting
• FY2006 (April 1, 2006 to March 31, 2007)
1. Significant components of deferred tax assets and liabilities are
summarized as follows:
Millions of yen
Deferred tax assets
1) Current assets
Enterprise taxes payable ¥ 114
Business office tax payable 50
Reserve for bonuses 760
Advances paid 36
Accrued expenses 588
Allowance for sales returns 536
Non-deductible portion of allowance for
doubtful accounts 119
Loss on write-offs of content production account 158
Loss on inventory revaluation 176
Loss on disposal of assets associated with
business restructuring 919
Non-deductible amortization of goodwill 110
Loss carried forward 4,059
Other 173
Valuation allowance (1,871)
Offset to deferred tax liabilities (current) (298)
Total 5,634
2) Non-current assets
Non-deductible portion of allowance for
employees’ retirement benefits 500
Allowance for directors’ retirement benefits 64
Non-deductible depreciation expense of property
and equipment 577
Loss on investments in securities 763
Non-deductible portion of allowance for
doubtful accounts 902
Allowance for closing of game arcades 1,201
Loss carried forward 5,891
Other 362
Valuation allowance (5,220)
Offset to deferred tax assets (non-current assets) (102)
Total 4,939
Net deferred tax assets 10,573
Deferred tax liabilities
1) Current liabilities
Accrued expenses and other cost calculation details 298
Offset to deferred tax assets (non-current assets) (298)
Total —
2) Non-current liabilities
Other 102
Offset to deferred tax assets (non-current assets) (102)
Total deferred tax liabilities —
Balance: Net deferred tax assets ¥10,573
2. A reconciliation of the statutory tax rate and the effective tax
rate is as follows:
Statutory tax rate 40.70%
Permanent differences relating to entertainment
expenses, etc., excluded from non-taxable expenses 0.45
Taxation on per capita basis for inhabitants’ taxes 0.63
Foreign taxes 0.23
Amortization of goodwill 7.13
Valuation allowance (6.95)
Refunded income taxes (0.62)
Adjustments to deferred tax assets (1.86)
Adjustments for unrecognized losses (1.52)
Differences in tax rates from
the parent company’s statutory tax rate (0.77)
Other (0.79)
Effective tax rate 36.63%
43