Isuzu 2014 Annual Report Download - page 32

30 Isuzu Motors Limited ■ Annual Report 2014
A reconciliation between effective statutory tax rate and the effective
tax rate reflected in the accompanying consolidated statements of
income for the years ended March 31, 2014 and 2013 are as follows:
n Correction of amounts of Deferred tax assets and Deferred tax
liabilities due to changes in Corporation Tax Rates, Etc.
The “Act for Partial Revision of the Income Tax Act, etc.” (Law
No. 10 of 2014) was promulgated on March 31, 2014, as a result of
which the Company is no longer subject to the special reconstruction
corporation tax effective the fiscal year beginning on or after April 1,
2014. In conjunction with this promulgation, the effective statutory
tax rate used to measure deferred tax assets and deferred tax liabilities
with respect to the temporary difference expected to be eliminated in
the fiscal year beginning on April 1, 2014 is changed from the previous
38.0% to 35.6%.
As a result of this change, deferred tax assets (after deduction
of deferred tax liabilities) decreased by 1,337 million yen ($12,995
thousands), and unrealized gain or loss from hedging activities
increased by 1 million yen ($14 thousands) and income taxes (deferred)
increased by 1,338 million yen ($13,009 thousands).
Other contingencies
Isuzu Motors Co., (Thailand) Ltd., a subsidiary of the Company in
Thailand engaged in production and distribution of vehicles, was in
discussions with the relevant authorities in Thailand over preferential
custom duty related to the past transactions. At present it is difficult to
make a reasonable estimate of the potential monetary impact resulting
from those discussions and the impact has not been reflected to the
current consolidated financial statements.
2014 2013
Effective statutory tax rate
Tax credit
Net valuation allowance
Difference in tax rates applied at
foreign subsidiaries
Loss for this fiscal year by
consolidated subsidiaries
Equity in earnings of
unconsolidated subsidiaries and affiliates
Foreign withholding tax
Per capital levy of inhabitant tax
Decrease in deferred tax assets due
to change in corporation tax rates
Others
Effective tax rate
38.0%
(7.3)
(3.3)
(7.6)
0.5
(3.0)
2.5
0.1
—
0.7
20.5
38.0%
(5.0)
0.5
(11.3)
0.6
(2.2)
1.7
0.1
0.7
0.7
23.7
7. Shareholders’ Equity
Changes in the numbers of shares issued and outstanding for the years
ended March 31, 2014 and 2013 are as follows:
Common stock outstanding
2014 2013
Balance at beginning of the year 1,696,845,339 1,696,845,339
Increase due to convertible stocks converted — —
Balance at end of the year 1,696,845,339 1,696,845,339
Treasury stock outstanding
2014 2013
Balance at beginning of the year 2,584,146 2,512,857
Increase due to purchase of odd stocks 148,858 71,289
Decrease due to sale of stocks (472,161) —
Balance at end of the year 2,260,843 2,584,146
8. Land Revaluation
In accordance with the Law concerning Revaluation of Land enacted
on March 31, 1999, the land used for business owned by the Company
and its domestic consolidated subsidiaries was revalued, and the
unrealized gain on the revaluation of land, net of deferred tax, was
reported as “Revaluation Reserve for Land” within net assets, and the
relevant deferred tax was reported as “Deferred Tax Liabilities related
to Land Revaluation” in liabilities for the fiscal year ended March 31,
2014.
Revaluation Date: March 31, 2000
In accordance with the Law concerning Revaluation of Land enacted
on March 31, 1998, the land used for business owned by certain
consolidated subsidiaries accounted for by the equity method was
revalued.
Revalued Date: March 31, 2001
The method of revaluation is as follows:
Under article 2-4 of the Enforcement Ordinance on Law concerning
Revaluation of Land, the land price for the revaluation was determined
based on the official notice prices assessed and published by the
Commissioner of National Tax Agency of Japan as basis for calculation
of Landholding Tax as stipulated in article 16 of the Landholding Tax
Law. Appropriate adjustments for the shape of land and the timing of
the assessment have been made. The land price for the revaluation for
some of the land is based on appraisal value.
The difference between the total fair value of business land, based
on the article 10 of the Enforcement Ordinance on Law concerning
Revaluation of Land, as of the end of the current fiscal year and
the total book value after revaluation revalued was ¥65,510 million
($636,514 thousands).
9. Contingent Liabilities
Contingent liabilities at March 31, 2014 and 2013 are as follows:
Thousands of
Millions of yen U.S. dollars
2014 2013 2014
Guarantees of bank loans
¥ 697 ¥ 1,128 $ 6,776