Epson 2013 Annual Report Download - page 69

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68
14. Income taxes
Epson is subject to a number of different income taxes that amounted to a statutory income tax rate in Japan
of approximately 40.4 % for the year ended March 31, 2012 and 37.8 % for the year ended March 31, 2013.
The significant components of deferred tax assets and liabilities as of March 31, 2012 and 2013, were as
follows:
Thousands of
Millions of yen
U.S. dollars
March 31 March 31,
2012 2013 2013
Deferred tax assets:
Net operating tax loss carry-forwards ¥78,788 ¥90,826 $965,720
Inter-company profits on inventories and write downs 16,060 18,925 201,222
Property, plant and equipment and intangible assets
(Impairment loss and excess of depreciation) 16,138 14,811 157,480
Provision for retirement benefits 7,434 8,981 95,491
Provision for bonuses 2,515 3,963 42,137
Devaluation of investment securities 2,512 2,512 26,709
One-time depreciation for assets 2,055 2,315 24,614
Provision for product warranties 2,099 2,229 23,700
Others 13,375 14,386 153,017
Gross deferred tax assets 140,981 158,953 1,690,090
Less: valuation allowance (121,063) (135,886) (1,444,827)
Total deferred tax assets 19,918 23,067 245,263
Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries and affiliates (7,728) (11,203) (119,117)
Net unrealized gains on land held by a subsidiary (2,277) (1,236) (13,141)
Valuation difference on available-for-sale securities (213) (341) (3,625)
Reserve for special depreciation for tax purpose (73) - -
Others (1,944) (1,001) (10,656)
Gross deferred tax liabilities (12,236) (13,782) (146,539)
Net deferred tax assets ¥7,681 ¥9,284 $98,724
The valuation allowance was established mainly against deferred tax assets on future tax-deductible
temporary differences and operating tax loss carry-forwards as it is probable that these deferred tax assets
will not be realized within the foreseeable future.