JVC 2007 Annual Report Download - page 46

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Information for 2006 is not prepared as the Company incurred a loss before income taxes and minority interests
in the year ended March 31, 2006.
2007 2005
Statutory tax rate: 40.6)%40.6)%
Lower tax rates of overseas subsidiaries 39.5)%(19.4)%
Expenses not deductible for tax purposes 25.1)%50.0)%
Effect of changes in valuation allowance for deferred tax assets 252.5)%(34.7)%
Foreign tax credit 46.0)%22.0)%
Expenses not taxable for tax purposes (7.2)% 49.6)%
Per capita portion of inhabitants’ taxes 5.8)%—)%
Other 16.5)%23.0)%
Effective tax rate 418.8)%131.1)%
Significant components of the Companies’ deferred tax assets and liabilities at March 31, 2007 and 2006 are
as follows:
Thousands of
Millions of yen U.S. dollars
2007 2006 2007
Deferred tax assets:
Loss on devaluation of inventory ¥05,149 ¥05,389 $43,636
Accrued expenses not deductible for tax purposes 7,058 6,572 59,814
Depreciation 9,774 8,799 82,831
Retirement and severance benefits 1,736 3,914 14,712
Tax loss carryforwards 29,107 27,486 246,669
Loss on devaluation of investment securities 1,195 —10,127
Other 5,810 9,270 49,236
Total gross deferred tax assets 59,829 61,430 507,025
Valuation allowance (43,617) (38,463) (369,635)
Net deferred tax assets 16,212 22,967 137,390
Deferred tax liabilities:
Net unrealized holding gains on securities (1,812) (4,246) (15,356)
Other (870) (993) (7,373)
Total gross deferred tax liabilities (2,682) (5,239) (22,729)
Net deferred tax assets ¥13,530 ¥17,728 $114,661
Net deferred taxes as of March 31, 2007 and 2006 are recorded in the consolidated balance sheets as follows:
Thousands of
Millions of yen U.S. dollars
2007 2006 2007
Current assets—Deferred tax assets ¥13,067 ¥20,271 $110,737
Other assets—Deffered tax assets 2,003 1,672 16,975
Current liabilities—Accrued expenses 10 27 85
Long-term liabilities—Deferred tax liabilities 1,530 4,188 12,966
Net deferred tax assets ¥13,530 ¥17,728 $114,661
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