Square Enix 2014 Annual Report Download - page 64

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62
2. A reconciliation of the statutory tax rate and the effective tax rate is as follows:
As of March 31, 2014 As of March 31, 2013
Statutory tax rate
38.01% —%
(Adjustments)
Permanent differences relating to entertainment expense and others excluded from
non-taxable expenses 0.77 —
Permanent differences relating to dividends received and others excluded from
non-taxable expenses (0.03) —
Valuation allowance (5.25) —
Taxation on a per capita basis for inhabitants’ tax 1.01 —
Tax credit for R&D expenses (3.08) —
Reduction of deferred tax assets and liabilities at fiscal year-end due to changes in
corporate tax rate 4.88 —
Differences in tax rate from the parent company’s statutory tax rate (0.35) —
Other (1.21) —
Effective tax rate 34.75 —
Note: No breakdown of key components is presented for the fiscal year ended March 31, 2013 because the Company posted a loss before income taxes and minority interests.
3. Revision to the amount of deferred tax assets and deferred tax liabilities due to changes in the income tax rate
The amendments to the Japanese corporate tax law were enacted on March 31, 2014, and the Company will no longer be subject to the Special
Corporation Tax for Reconstruction from the fiscal year beginning on April 1, 2014. In accordance with this Act, the statutory tax rate used for the
calculation of deferred tax assets and deferred tax liabilities has been changed from the 38.01% applicable hitherto to 35.64%, for the temporary
differences likely to be eliminated in the fiscal year beginning on April 1, 2014.
As a result of this change in the tax rate, the net amount of deferred tax assets (after deduction of deferred tax liabilities) decreased ¥189 million,
and deferred income taxes increased by the same amount.
Business Combinations
■ Year ended March 31, 2014
Not applicable
Asset Retirement Obligations
Balance Sheet Amount for Asset Retirement Obligations
a) Summary of applicable asset retirement obligations
Asset retirement obligations include the duty of restoration arising from contractual requirements set forth in real estate leases for buildings,
including offices at the headquarters, as well as amusement facility arcades.
b) Assumptions used in calculating applicable asset retirement obligations
Asset retirement obligations on buildings, including offices at the headquarters, are based on estimated useful life, generally ranging between 10
and 15 years, and a discount rate generally set between 0.801% and 2.240%.
For amusement facility arcades, asset retirement obligations are based on an estimated useful life of 10 years—the average operating period for
arcades that have been closed—and a discount rate between 0.645% and 1.355%.
Notes to Consolidated Financial Statements (JPNGAAP)