Fujitsu 2001 Annual Report Download - page 42

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40
11. Income Taxes
The Group is subject to a number of different income taxes. The statutory tax rates in Japan for the years ended
March 31, 1999, 2000, and 2001 in the aggregate were approximately 47%, 42%, and 42%, respectively.
The components of income taxes are as follows: Yen U.S. Dollars
(millions) (thousands)
Years ended March 31 1999 2000 2001 2001
Current ¥57,588 ¥65,595 ¥134,882 $ 1,087,758
Deferred (2,053) (37,216) 5,818 46,919
Changes in deferred tax rate (856) ———
Income taxes ¥54,679 ¥28,379 ¥140,700 $ 1,134,677
A reconciliation of the difference between reported total income tax rate and applicable statutory income tax rate for
the years ended March 31, 2000 and 2001 is as follows:
Statutory income tax rate 42.0% 42.0%
Increase (Decrease) in tax rate:
Valuation allowance for deferred tax assets (13.5) 32.5
Tax effect to realization of equity in earnings of affiliates from
establishment of stock holding trust for retirement benefit plan —10.1
Amortization of goodwill 15.5 7.5
Tax effect on equity in earnings of affiliates, net (9.6) (3.6)
Non-deductible expenses for tax purposes 4.6 2.2
Other (1.1) (1.4)
Reported total income tax rate 37.9% 89.3%
The significant components of deferred tax assets and liabilities at March 31, 2000 and 2001 are as follows:
Yen U.S. Dollars
(millions) (thousands)
2000 2001 2001
Deferred tax assets:
Tax loss carryforwards ¥ 193,307 ¥272,244 $ 2,195,516
Accrued retirement benefits 31,793 212,258 1,711,758
Accrued employee benefits 13,441 26,041 210,008
Provision for loss on repurchase of computers 20,646 21,580 174,032
Intercompany profit on inventory and property, plant and equipment
13,635 12,389 99,911
Accrued enterprise taxes 3,518 9,942 80,177
Other 19,734 17,654 142,372
Gross deferred tax assets 296,074 572,108 4,613,774
Less: Valuation allowance (199,557) (275,703) (2,223,411)
Total deferred tax assets 96,517 296,405 2,390,363
Deferred tax liabilities:
Gains on establishment of stock holding trust for retirement benefit plan
—(213,827) (1,724,411)
Retained earnings appropriated for tax allowable reserves (43,598) (41,097) (331,427)
Unrealized gains on securities —(14,740) (118,871)
Other (6,154) (646) (5,210)
Gross deferred tax liabilities (49,752) (270,310) (2,179,919)
Net deferred tax assets ¥46,765 ¥26,095 $ 210,444
Net deferred tax assets are included in the consolidated balance sheets as follows:
Yen U.S. Dollars
(millions) (thousands)
At March 31 2000 2001 2001
Other current assets ¥40,287 ¥57,233 $461,556
Other investments and long-term loans 14,507 25,058 202,081
Other current liabilities (1,663) (95) (766)
Other long-term liabilities (6,366) (56,101) (452,427)
Net deferred tax assets ¥46,765 ¥26,095 $210,444
Notes to C onsolidated Financial S tatements