Epson 2015 Annual Report Download - page 84

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18. Income Taxes
(1) Deferred Tax Assets and Deferred Tax Liabilities
The breakdown of “Deferred tax assets” and “Deferred tax liabilities” by major causes of their occurrence were as
follows:
(Note 1) “Fixed assets” include impairment losses and excess of depreciation of property, plant and equipment,
intangible assets and investment property.
(Note 2) The difference between the net amount of deferred tax assets recognised in the years ended March 31,
2014 and 2015, less the respective net amounts of deferred tax assets recognised directly in equity and in other
comprehensive income, is mainly attributable to the impact of foreign exchange movements.
Epson assesses its ability to utilize carryforward of unused tax losses in future periods based on the Mid-Range
Business Plan and financial forecasts approved by the Board of Directors annually. This takes account of Epson’ s
medium and long-term strategy and financial plans and the expected future economic outlook. The ability to utilize
carryforward of unused tax losses in future periods for recognising deferred tax assets also takes account of
material tax adjusting items, the expected future taxable income and the period (if any) in which carryforward of
unused tax losses might expire. Epson believes that the recognised deferred tax assets are probable and the tax
benefits can be realized based on the prior taxable income and the expected future taxable income when the
deferred tax assets can be recognised.
Epson does not recognise deferred tax assets for some carryforward of unused tax losses and some deductible
temporary differences. Epson reduces the amount of the deferred tax assets to the extent that it is no longer
probable that the tax benefits can be realized with based on an individual analysis of each company’ s condition as a
result of assessing the recoverability of the deferred tax assets.
The amounts of carryforward of unused tax losses, for which deferred tax assets have not been recognised, as of
March 31, 2014 and 2015, were ¥45,409 million and ¥8,247 million ($68,627 thousand), respectively. The amounts
of deductible temporary differences, for which deferred tax assets have not been recognised, as of March 31, 2014
and 2015, were ¥278,308 million and ¥240,737 million ($2,003,303 thousand), respectively. The deductible
temporary differences are not expired under present tax laws. The expiration schedule of carryforward of unused
tax losses was as follows.
Millions of yen
Thousands of
U.S. dollars
March 31
March 31,
2014
2015
2015
Carryforward of unused tax losses
30,752
29,168
242,722
Inter-company profits and write downs on
inventories
21,305 22,654 188,516
Fixed assets (Note 1)
5,561
7,425
61,787
Net defined benefit liabilities
14,155
5,280
43,937
Other
20,068
27,948
232,589
Total deferred tax assets
91,843
92,477
769,551
Undistributed profit
(12,789)
(14,186)
(31,730)
Fixed assets (Note 1)
(6,760)
(3,813)
(118,049)
Other
(5,148)
(5,019)
(41,782)
Total deferred tax liabilities
(24,697)
(23,020)
(191,561)
Net deferred tax assets(Note2)
67,145
69,457
577,990