Canon 2010 Annual Report Download - page 91
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The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities at December 31, 2010
and 2009 are presented below:
December 31
Millions of yen
Thousands of
U.S. dollars
2010 2009 2010
Deferred tax assets:
Inventories ¥ 23,836 ¥ 24,121 $ 294,272
Accrued business tax 6,200 3,861 76,543
Accrued pension and severance cost 78,552 52,639 969,778
Research and development—costs capitalized for tax purposes 14,740 45,718 181,975
Property, plant and equipment 41,737 53,011 515,272
Accrued expenses 35,823 29,409 442,259
Net operating losses carried forward 28,373 12,305 350,284
Other 52,869 44,709 652,704
282,130 265,773 3,483,087
Less valuation allowance (35,307) (22,188) (435,889)
Total deferred tax assets 246,823 243,585 3,047,198
Deferred tax liabilities:
Undistributed earnings of foreign subsidiaries (8,215) (8,023) (101,420)
Net unrealized gains on securities (2,119) (2,052) (26,160)
Tax deductible reserve (6,038) (7,797) (74,543)
Financing lease revenue (37,353) (35,505) (461,148)
Prepaid pension and severance cost (2,018) (314) (24,914)
Other (35,132) (16,129) (433,729)
Total deferred tax liabilities (90,875) (69,820) (1,121,914)
Net deferred tax assets ¥155,948 ¥173,765 $1,925,284
The net changes in the total valuation allowance were
increases of ¥13,119 million ($161,963 thousand), ¥11,371 mil-
lion and ¥1,490 million for the years ended December 31, 2010,
2009 and 2008, respectively.
Based upon the level of historical taxable income and projec-
tions for future taxable income over the periods which the net
deductible temporary differences are expected to reverse,
management believes it is more likely than not that Canon will
realize the benefi ts of these deferred tax assets, net of the
existing valuation allowance, at December 31, 2010.
At December 31, 2010, Canon had net operating losses
which can be carried forward for income tax purposes of
¥112,779 million ($1,392,333 thousand) to reduce future taxable
income. Periods available to reduce future taxable income vary
in each tax jurisdiction and generally range from one year to
twenty years as follows:
Millions of yen
Thousands of
U.S. dollars
Within one year ¥ 511 $ 6,309
After one year through fi ve years 9,601 118,531
After fi ve years through ten years 47,961 592,111
After ten years through twenty years 28,689 354,185
Indefi nite period 26,017 321,197
Total ¥112,779 $1,392,333