Square Enix 2011 Annual Report Download - page 60

Tax Effect Accounting
■ 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 game arcade closings 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 game arcade closings 272
Loss carried forward 756
Other 311
Valuation allowance (2,376)
Offset to deferred tax liabilities (non-current) (530)
Total 1,682
Total deferred tax assets 7,913
Deferred tax liabilities
(1) Current liabilities
Accrued expenses and other cost calculation details 162
Enterprise taxes receivable 46
Offset to deferred tax assets (non-current assets) (209)
Total —
(2) Non-current liabilities
Non-current assets 190
Tax effects from intangible non-current assets
relating to business combinations 2,487
Other 206
Offset to deferred tax assets (non-current) (530)
Notes to Consolidated Financial Statements (JPNGAAP)
Total 2,354
Total deferred tax liabilities 2,354
Balance: Net deferred tax assets ¥5,559
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 3.81
Permanent differences relating to dividends
received, etc., excluded from non-taxable expenses (1.39)
Valuation allowance 5.14
Taxation on a per capita basis for inhabitants’ tax 0.39
Amortization of goodwill 55.79
Use of tax loss carried forward (116.93)
Taxes for prior fiscal years, etc. 14.12
Differences in tax rate from the parent
company’s statutory tax rate 1.44
Other 1.34
Effective tax rate 4.68%
■ Year ended March 31, 2011
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 212
Business office tax payable 46
Reserve for bonuses 440
Accrued expenses 659
Allowance for sales returns 200
Non-deductible portion of allowance for
doubtful accounts 88
Tax credits 503
Loss on write-offs of content production account 2,237
Loss on inventory revaluation 645
Allowance for game arcade closings 197
Loss carried forward 171
Other 145
Valuation allowance (863)
Offset to deferred tax liabilities (current) (191)
Total 4,493
2) Non-current assets
Non-deductible portion of allowance for employees’
retirement benefits 1,252
Allowance for directors’ retirement benefits 96
Expense for stock-based compensation 336
Non-deductible depreciation expense of property
and equipment 200
Asset retirement obligations 181
Impairment loss 424
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