Square Enix 2008 Annual Report Download - page 46

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• FY2007 (April 1, 2007 to March 31, 2008)
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 ¥ 79
Business office tax payable 55
Reserve for bonuses 731
Advances paid 36
Accrued expenses 361
Allowance for sales returns 199
Non-deductible portion of allowance for
doubtful accounts 239
Tax credit 294
Loss on write-offs of content production account 1,884
Loss carried forward 1,639
Loss on inventory revaluation 123
Loss on disposal of assets associated with
business restructuring 347
Other 130
Valuation allowance (1,485)
Offset to deferred tax liabilities (current) (480)
Total 4,158
2) Non-current assets
Non-deductible portion of allowance for
employees’ retirement benefits 1,086
Allowance for directors’ retirement benefits 77
Non-deductible depreciation expense of property
and equipment 537
Loss on investments in securities 379
Non-deductible portion of allowance for
doubtful accounts 780
Tax effect from sale of stock of
affiliated companies 1,965
Allowance for closing of game arcades 413
Loss carried forward 4,816
Other 179
Valuation allowance (9,382)
Total 852
Net deferred tax assets 5,010
Deferred tax liabilities
Current liabilities
Accrued expenses and other cost calculation details 480
Offset to deferred tax assets (non-current assets) (480)
Total —
Total deferred tax liabilities —
Balance: Net deferred tax assets ¥5,010
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 0.47
Permanent differences relating to
dividends received, etc., excluded from
non-taxable expenses (0.01)
Taxation on a per capita basis for inhabitants’ taxes 0.38
Deduction for foreign taxes paid 1.82
Amortization of goodwill 3.33
Valuation allowance (5.87)
Tax effect from sale of stock of affiliated companies 5.03
Adjustments for unrecognized losses (0.03)
Differences in tax rates from
the parent company’s statutory tax rate (1.35)
Other 0.84
Effective tax rate 45.31%
44