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60 Fujitsu Limited
The significant components of deferred tax assets and liabilities at March 31, 2004 and 2005 were as follows:
Yen U.S. Dollars
(millions) (thousands)
At March 31 2004 2005 2005
Deferred tax assets:
Tax loss carryforwards ¥ 402,881 ¥ 271,554 $ 2,537,888
Accrued retirement benefits 189,402 139,585 1,304,533
Accrued bonus 35,949 36,854 344,430
Provision for loss on repurchase of computers 19,645 17,607 164,551
Intercompany profit on inventory and property,
plant and equipment 10,106 6,417 59,972
Other 62,132 67,811 633,747
Gross deferred tax assets 720,115 539,828 5,045,121
Less:
Valuation allowance (217,721) (289,910) (2,709,439)
Total deferred tax assets 502,394 249,918 2,335,682
Deferred tax liabilities:
Gains from establishment of stock holding trust for
retirement benefit plan ¥(206,699) ¥(110,617) $(1,033,804)
Unrealized gains on securities (102,552) (67,457) (630,439)
Retained earnings appropriated for tax allowable reserves (10,816) (8,942) (83,570)
Other (2,060) (548) (5,121)
Gross deferred tax liabilities (322,127) (187,564) (1,752,934)
Net deferred tax assets ¥ 180,267 ¥ 62,354 $ 582,748
Net deferred tax assets were included in the consolidated balance sheets as follows:
Yen U.S. Dollars
(millions) (thousands)
At March 31 2004 2005 2005
Other current assets ¥103,449 ¥75,515 $ 705,748
Other investments and long-term loans 89,868 40,085 374,626
Other current liabilities (6,448) (690) (6,449)
Other long-term liabilities (6,602) (52,556) (491,177)
Net deferred tax assets ¥180,267 ¥62,354 $ 582,748
The Company and the wholly owned subsidiaries in Japan have adopted the consolidated tax return system of Japan.
Tax losses can be carried forward up to 7 years in Japan, 20 years in the United States, and indefinitely in the United Kingdom.
Realization depends on the abilities of the companies to generate sufficient taxable income prior to the expiration of the tax loss
carryforwards. With respect to deferred tax assets, we recorded a valuation allowance to cover the amount in excess of what we are
likely to recover in the future.
Deferred tax liabilities have not been provided on the undistributed profit of affiliates, as it is deemed that any distri-
butions will not give rise to tax liabilities.
Deferred tax assets have not been provided for losses on investments in subsidiaries except for those expected to be realized.