Square Enix 2010 Annual Report Download - page 56

Notes to Consolidated Financial Statements (JPNGAAP)
Tax Effect Accounting
■ Year ended March 31, 2009
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 ¥ 305
Business office tax payable 51
Reserve for bonuses 601
Accrued expenses 263
Allowance for sales returns 366
Non-deductible portion of allowance for
doubtful accounts 86
Tax credit 23
Loss on write-offs of content production account 2,660
Loss on inventory revaluation 256
Allowance for closing of game arcades 181
Other 141
Valuation allowance (839)
Offset to deferred tax liabilities (current) (216)
Total 3,882
2) Non-current assets
Non-deductible portion of allowance for
employees’ retirement benefits 924
Allowance for directors’ retirement benefits 85
Expense for stock-based compensation 166
Non-deductible depreciation expense of property
and equipment 707
Loss on investments in securities 410
Non-deductible portion of allowance for
doubtful accounts 124
Research and development expense 294
Allowance for closing of game arcades 293
Loss carried forward 8,557
Other 194
Valuation allowance (10,807)
Total 952
Net deferred tax assets 4,834
Deferred tax liabilities
Current liabilities
Accrued expenses and other cost calculation details 216
Offset to deferred tax assets (non-current assets) (216)
Total —
Total deferred tax liabilities —
Balance: Net deferred tax assets ¥ 4,834
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
expense, etc., excluded from non-taxable expenses 1.02
Permanent differences relating to dividends received,
etc., excluded from non-taxable expenses (0.05)
Taxation on a per capita basis for inhabitants’ tax 1.69
Deduction for foreign taxes paid (0.50)
Amortization of goodwill 4.91
Valuation allowance 14.05
Special deduction for experiment and research expenses (5.90)
Tax refund (20.11)
Differences in tax rate from the parent
company’s statutory tax rate (3.00)
Other (1.57)
Effective tax rate 31.24%
■ Year ended March 31, 2010
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 ¥ 270
Business office tax payable 31
Reserve for bonuses 644
Accrued expenses 281
Allowance for sales returns 460
Non-deductible portion of allowance for
doubtful accounts 337
Loss on write-offs of content production account 3,815
Loss on inventory revaluation 407
Allowance for closing of game arcades 135
Other 67
Valuation allowance (10)
Offset to deferred tax liabilities (current) (209)
Total 6,231
2) Non-current assets
Non-deductible portion of allowance for employees’
retirement benefits 959
Allowance for directors’ retirement benefits 90
Expense for stock-based compensation 296
Non-deductible depreciation expense of property
and equipment 214
Impairment loss 508
Loss on investments in securities 482
Non-deductible portion of allowance for doubtful accounts 57
Loss carried forward, etc., at overseas subsidiaries 527
Research and development expense 112
Allowance for closing of game arcades 272
Loss carried forward 756
Other 311
Valuation allowance (2,376)
Offset to deferred tax liabilities (non-current) (530)
Total 1,682
Net deferred tax assets 7,913
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