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9. Income Taxes
The Group is subject to a number of different income taxes. The statutory income tax rate in the aggregate in Japan was approximately
40.6% for the years ended March 31, 2010 and 2011.
The components of income taxes are as follows:
Yen
(millions)
U.S. Dollars
(thousands)
Years ended March 31 2010 2011 2011
Current ¥ 27,059 ¥35,057 $422,373
Deferred (11,283) 13,122 158,097
Income taxes ¥ 15,776 ¥48,179 $580,470
The reconciliations between the statutory income tax rate and the effective income tax rates for the years ended March 31, 2010
and 2011 are as follows:
Years ended March 31 2010 2011
Statutory income tax rate 40.6% 40.6%
Increase (Decrease) in tax rates:
Valuation allowance for deferred tax assets (38.0%) 7.6%
Goodwill amortization 8.4% 6.2%
Tax credit (1.3%) (4.1%)
Non-deductible expenses for tax purposes 2.7% 3.5%
Non-taxable income (0.5%) (1.8%)
Tax effect on equity in earnings of affiliates, net (1.0%) (1.5%)
Other 3.1% (3.4%)
Effective income tax rates 14.0% 47.1%
The significant components of deferred tax assets and liabilities at March 31, 2010 and 2011 are as follows:
Yen
(millions)
U.S. Dollars
(thousands)
At March 31 2010 2011 2011
Deferred tax assets:
Accrued retirement benefits ¥ 152,967 ¥ 150,851 $ 1,817,482
Tax loss carryforwards 142,631 145,132 1,748,579
Excess of depreciation and amortization and impairment loss, etc. 64,696 54,591 657,723
Accrued bonus 41,907 43,489 523,964
Inventories 23,977 23,081 278,084
Loss on revaluation of investment securities 12,725 9,615 115,843
Provision for product warranties 4,959 6,250 75,301
Provision for loss on repurchase of computers 8,825 6,056 72,964
Intercompany profit on inventories and property, plant and equipment 2,950 5,688 68,530
Other 66,567 57,224 689,446
Gross deferred tax assets 522,204 501,977 6,047,916
Less: Valuation allowance (261,079) (256,153) (3,086,181)
Total deferred tax assets 261,125 245,824 2,961,735
Deferred tax liabilities:
Gains from establishment of stock holding trust for retirement benefit plan ¥(110,617) ¥(110,617) $(1,332,735)
Unrealized gains on securities (10,558) (9,639) (116,133)
Tax allowable reserves (3,444) (2,245) (27,048)
Other (7,448) (8,944) (107,759)
Total deferred tax liabilities (132,067) (131,445) (1,583,675)
Net deferred tax assets ¥ 129,058 ¥ 114,379 $ 1,378,060
116 FUJITSU LIMITED ANNUAL REPORT 2011
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS