Olympus 2009 Annual Report Download - page 51

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One of the other consolidated subsidiaries completed a 2-for-1 stock split by way of a free share distribution in the year ended March
31, 2008. The number of options and exercise price in the above information reflect from the stock split.
The fairly evaluated unit values on the stock options of the other consolidated subsidiaries were evaluated by the intrinsic value per
unit for the year ended March 31, 2008. The evaluation methods utilized by the consolidated subsidiaries were net equity value method,
cash flow method, or other methods which were optimum at the evaluation dates.
The total intrinsic value of the stock options was ¥31 million at the March 31, 2008 year-end.
The total intrinsic value of the stock options exercised during the year was ¥— million at the date of exercise.
13. INCOME TAXES
Income taxes applicable to the Company and its domestic consolidated subsidiaries consist of corporate tax, inhabitant tax and enterprise
tax, which in the aggregate resulted in normal statutory rates of approximately 40.7% for the years ended March 31, 2009, 2008 and 2007.
Income taxes of foreign consolidated subsidiaries are based generally on tax rates applicable in their countries of incorporation.
The following table summarizes the significant differences between the statutory tax rate and the Company's effective tax rate for
consolidated financial statement purposes for the years ended March 31, 2008 and 2007.
The factors of significant differences for fiscal 2009 are not stated as net loss before income taxes was recorded.
2009 2008 2007
Japanese statutory tax rate .......................................................................................... — 40.7% 40.7%
Non-deductible expenses .......................................................................................... —1.2 2.1
Effect of foreign tax rate differences.......................................................................... —(0.8) (2.5)
Increase (decrease) of allowance for evaluation ......................................................... —(2.2) (1.0)
Tax deduction for research and development ............................................................. —(4.0) (6.6)
Amortization of consolidated adjustment accounts ................................................... —— —
Amortization of goodwill ............................................................................................ —3.7 3.6
Other, net ................................................................................................................... —0.2 (0.9)
Effective tax rate .......................................................................................................... —38.8% 35.4%
Significant components of deferred income tax assets and liabilities as of March 31, 2009 and 2008 were as follows:
Millions of yen
Thousands of
U.S. dollars
2009 2008 2009
Deferred income tax assets ..........................................................................................
Inventories ................................................................................................................. ¥ 9,888 ¥ 9,123 $ 104,084
Prepaid expenses....................................................................................................... 10,891 9,478 114,642
Accrued bonuses ....................................................................................................... 3,320 5,877 34,947
Unrealized intercompany profits ................................................................................ 5,194 8,019 54,674
Depreciation of property, plant and equipment .......................................................... 6,438 4,955 67,768
Depreciation of intangible assets ............................................................................... 10,340 11,340 108,842
Deferred assets ......................................................................................................... 677 436 7,126
Severance and retirement allowances ....................................................................... 6,371 3,164 67,063
Securities .................................................................................................................. 7,788 3,175 81,979
Deficit carried forward ............................................................................................... 15,701 16,223 165,274
Other ......................................................................................................................... 7,979 6,025 83,990
Subtotal ..................................................................................................................... 84,587 77,815 890,389
Allowance for evaluation ............................................................................................ (27,233) (21,155) (286,663)
Total deferred income tax assets 57,354 56,660 603,726
Prepaid pension expenses ......................................................................................... (5,803) (4,409) (61,084)
Basis differences in assets acquired and liabilities assumed upon acquisition .......... (23,542) (30,918) (247,811)
Other ......................................................................................................................... (4,456) (7,441) (46,905)
Total deferred income tax liabilities ............................................................................. (33,801) (42,768) (355,800)
Net deferred income tax assets .................................................................................... ¥ 23,553 ¥ 13,892 $ 247,926
14. NET ASSETS
The Japanese Corporate Law (“the Law”) became effective on May 1, 2006, replacing the Japanese Commercial Code (“the Code”). The Law
is generally applicable to events and transactions occurring after April 30, 2006 and for fiscal years ending after that date.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However,