Nintendo 2015 Annual Report Download - page 45

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- 43 -
Income taxes
1. Significant components of deferred tax assets and liabilities
Previous fiscal year
(As of March 31, 2014)
Current fiscal year
(As of March 31, 2015)
Deferred tax assets
Research and development expenses ¥ 34,794 million ¥ 33,806 million U.S.$ 281 million
Operating loss carryforwards for tax purposes 17,527 16,546 137
Unrealized intra-group profit and write-downs on
inventory 13,620 11,005 91
Net defined benefit liability 6,846 9,508 79
Accounts payable - other and accrued expenses 7,588 7,987 66
Revenue recognition for tax purposes 5,274 5,080 42
Other 16,628 19,002 158
Deferred tax assets subtotal 102,280 102,936 857
Valuation allowance (30,133) (35,171) (293)
Total deferred tax assets 72,146 67,765 564
Deferred tax liabilities
Valuation difference on available-for-sale
securities (6,685) (7,077) (58)
Undistributed retained earnings of subsidiaries
and associates (7,143) (6,827) (56)
Other (7,200) (8,502) (70)
Total deferred tax liabilities (21,029) (22,406) (186)
Net deferred tax assets ¥ 51,116 ¥ 45,359 U.S.$ 377
2. Significant factors in the difference between the statutory tax rate and effective tax rate
Previous fiscal year
(As of March 31, 2014)
Current fiscal year
(As of March 31, 2015)
Statutory tax rate 37.9% 35.5%
(Reconciliations)
Effect of change in the statutory tax rate 20.0 6.0
Valuation allowance 243.4 2.0
Foreign tax credit on retained earnings of the overseas
consolidated subsidiaries 3.1 (0.2)
Different tax rates applied to the consolidated subsidiaries 9.6 (0.4)
Special deduction applied to the gross research and
development expenses (8.9) (1.6)
Other 7.2 0.7
Effective tax rate after tax effect accounting 312.3 41.9
3. Amendment to deferred tax assets and liabilities due to change in corporation tax rates
Following the promulgation on March 31, 2015 of “Act for Partial Amendment of the Income Tax Act, etc.” (Act
No. 9 of 2015) and “Act for Partial Amendment of the Council Tax Act, etc.” (Act No. 2 of 2015), the effective
statutory tax rate used to measure deferred tax assets and liabilities was changed from 35.5% to 33.0% for
temporary differences expected to be eliminated in the fiscal year beginning on April 1, 2015 and to 32.2% for
temporary differences expected to be eliminated in the fiscal year beginning on and after April 1, 2016.
As a result, deferred tax assets after offsetting deferred tax liabilities decreased by 3,678 million yen (U.S.$30
million) and valuation difference on available-for-sale securities increased by 649 million yen (U.S.$5 million).
Income taxes-deferred increased by 4,327 million yen (U.S.$36 million).