Mitsubishi 2015 Annual Report Download - page 66

The significant components of deferred tax assets and liabilities
as of March 31, 2015 and 2014 consisted of the following:
(In millions of yen)
(In thousands
of U.S. dollars)
March 31,
2015 2014 2015
Deferred tax assets:
Net operating losses
carried forward
¥ 116,015 ¥ 126,416 $ 965,427
Net defined benefit liability 32,435 40,429 269,911
Allowance for doubtful
accounts
2,278 3,115 18,960
Allowance for product
warranties
12,074 10,811 100,475
Accounts payable
– warranties
15,214 19,432 126,611
Fixed assets
(incl. impairment losses)
39,799 32,456 331,194
Others 31,526 26,884 262,348
Less valuation allowance (186,150) (210,563) (1,549,063)
Total deferred tax assets 63,193 48,984 525,865
Deferred tax liabilities:
Unrealized holding gain on
securities
(3,662) (3,100) (30,475)
Fair value adjustments
relating to land
(3,365) (3,739) (28,008)
Reserves under the Special
Taxation Measures Law
(207) (230) (1,728)
Accelerated depreciation
in overseas consolidated
subsidiaries
(24,855) (20,418) (206,832)
Others (26,426) (24,220) (219,913)
Total deferred tax liabilities (58,517) (51,709) (486,958)
Net deferred tax liabilities ¥ 4,675 ¥ (2,725) $ 38,906
Deferred tax assets and liabilities at March 31, 2015 and 2014 are
included in the accompanying consolidated balance sheets as follows:
(In millions of yen)
(In thousands
of U.S. dollars)
March 31,
2015 2014 2015
Current assets ¥ 24,742 ¥ 15,445 $ 205,895
Non-current assets 9,914 9,898 82,507
Current liabilities (11) (15) (91)
Non-current liabilities (29,970) (28,053) (249,404)
Net deferred tax liabilities ¥ 4,675 ¥ (2,725) $ 38,906
The “Act for Partial Amendment of the Income Tax Act, etc.”
(Act No. 9 of 2015) and the “Act for Partial Amendment of the
Local Tax Act, etc.” (Act No. 2 of 2015) were promulgated on
March 31, 2015. As a result, the effective statutory tax rate used
to measure MMC’s deferred tax assets and liabilities was changed
from 35.2% to 32.7% and 31.9% for the temporary differences
expected to be realized or settled in the year beginning April 1,
2015 and for the temporary differences expected to be realized or
settled from April 1, 2016, respectively. The effect of this change
was immaterial.
19. Asset Retirement Obligations
(a) Overview
MMC and its consolidated subsidiaries have obligations associated
with the restoration and removal of tangible fixed assets at the end
of lease terms pertaining to certain property lease agreements, and
have obligations associated with removal of hazardous substances.
(b) Method for measuring the amount of asset retirement
obligations
The useful lives of assets from acquisition or construction date has
been estimated ranging from 2 to 60 years, and the amount of
asset retirement obligations has been measured using the discount
rates ranging from 0.2% to 4.4%.
(c) Changes in the amount of asset retirement obligations
Changes in the amount of asset retirement obligations for the years
ended March 31, 2015 and 2014 were as follows:
(In millions of yen)
(In thousands
of U.S. dollars)
For the year ended March 31,
2015 2014 2015
Balance at beginning
of year ¥5,247 ¥ 7,386 $43,669
Increase due to the
acquisition of property,
plant and equipment 547 45
Discount accretion
expense 109 112 914
Decrease due to the
settlement of asset
retirement obligations (156) (972) (1,305)
Decrease due to change
in estimate —(1,289) —
Others (*) (9) (37) (75)
Balance at end of year ¥5,197 ¥ 5,247 $43,249
(*) Others include foreign currency translation adjustments and the effect of
deconsolidation.
MITSUBISHI MOTORS CORPORATION
Annual Report 2015
64