Hitachi 2010 Annual Report Download - page 81

79
Hitachi, Ltd. Annual Report 2010
An increase in valuation allowance for the year ended March 31, 2010 related primarily to the addition of certain previously
consolidated domestic subsidiaries to the Company’s consolidated taxation group when they became wholly-owned during
the year ended March 31, 2010. A valuation allowance was recorded for these subsidiaries’ deferred tax assets as the
Company concluded that it was not more-likely-than-not that these deferred tax assets would be realized within the
consolidated taxation group.
The Company recognized an additional valuation allowance during the year ended March 31, 2009 resulting from the
reassessment of the realizability of the beginning of the year deferred tax assets mainly related to the deductible temporary
differences associated with retirement benefits and net operating loss carryforwards. The Company concluded that the
generation of significant taxable income of the Company and certain subsidiaries was not expected in the near future and
therefore increased the valuation allowance related to the deferred tax assets associated with those entities.
An increase in valuation allowance for the year ended March 31, 2008 resulted mainly from a decline in profitability in the
plasma TV business.
The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and
liabilities as of March 31, 2010 and 2009 are presented below:
Millions of yen
Thousands of
U.S. dollars
2010 2009 2010
Total gross deferred tax assets:
Retirement and severance benefits . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 406,838 ¥ 467,356 $ 4,374,602
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292,644 295,334 3,146,710
Property, plant and equipment, due to differences in depreciation . . . 63,534 56,522 683,161
Investment in securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,158 89,145 732,882
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273,549 214,017 2,941,387
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226,134 279,537 2,431,548
1,330,857 1,401,911 14,310,290
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,076,848) (1,067,145) (11,579,011)
254,009 334,766 2,731,279
Total gross deferred tax liabilities:
Deferred profit on sale of properties . . . . . . . . . . . . . . . . . . . . . . . . . . (27,955) (27,172) (300,591)
Tax purpose reserves regulated by Japanese tax laws . . . . . . . . . . . . (6,961) (7,658) (74,850)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (66,627) (50,501) (716,419)
(101,543) (85,331) (1,091,860)
Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 152,466 ¥ 249,435 $ 1,639,419
In addition to the above, income taxes paid on net intercompany profit on assets remaining within the group, which had been
deferred in accordance with ASC 810, “Consolidation,” as of March 31, 2010 and 2009 are reflected in the accompanying
consolidated balance sheets under the following captions:
Millions of yen
Thousands of
U.S. dollars
2010 2009 2010
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . ¥23,090 ¥19,164 $248,279
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,622 52,044 533,570
¥72,712 ¥71,208 $781,849