Mitsubishi 2004 Annual Report Download - page 55

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53
The effective tax rates reflected in the accompanying consolidated statements of operations for the years ended March 31, 2004
and 2003 differ from the statutory tax rate for the following reasons:
%
2004 2003
Statutory income tax rate for MMC 41.6 41.7
Increase in valuation allowance, effect of use of loss carryforwards and similar (211.3) (41.9)
Income (loss) from affiliates accounted for by the equity method 8.9 (2.3)
Amortization of consolidation goodwill 0.8 (0.8)
Decrease by tax effect of subsidiaries in North America (8.3) —
Expenses not deductible for income tax purposes (2.1) 5.3
Loss on sales of affiliates (2.1) —
Other (6.1) 5.2
Income taxes as a percentage of (loss) gain before income taxes
and minority interests (178.6) 7.2
The significant components of deferred tax assets and liabilities as of March 31, 2004 and 2003 were as follows:
In millions of yen In thousands of
U.S. dollars
2004 2003 2004
Deferred tax assets:
Net operating loss carryforwards ¥ 162,820 ¥ 120,460 $ 1,540,550
Accrued retirement benefits 41,663 39,370 394,204
Allowance for doubtful accounts 32,635 38,286 308,788
Allowance for product warranty 17,865 15,944 169,040
Accounts payable — warranty 15,279 18,539 144,564
Other 95,251 104,780 901,237
Less valuation allowance (285,943) (125,202) (2,705,494)
Total deferred tax assets 79,573 212,179 752,892
Deferred tax liabilities:
Reserves under the Special Taxation Measures Law (3,291) (1,773) (31,139)
Unrealized holding gain on securities (12,693) (21,762) (120,099)
Fair value adjustment relating to land in consolidated subsidiaries (6,338) (8,021) (59,971)
Accelerated depreciation of overseas consolidated subsidiaries (42,029) (50,378) (397,669)
Other (15,543) (8,503) (147,067)
Total deferred tax liabilities (79,896) (90,438) (755,948)
Net deferred tax assets ¥ (323) ¥ 121,741 $ (3,056)
Deferred tax assets and liabilities at March 31, 2004 and 2003 are included in the consolidated balance sheets as follows:
In millions of yen In thousands of
U.S. dollars
2004 2003 2004
Current assets ¥ 4,979 ¥ 54,955 $ 47,117
Investments and other assets 19,721 77,644 186,600
Other current liabilities (273) (327) (2,587)
Non-current liabilities (24,751) (10,532) (234,186)
Net deferred tax assets ¥ (323) ¥121,741 $ (3,056)