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11. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate,
resulted in a normal effective statutory tax rate of approximately 41% for the years ended March 31, 2010 and 2009.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and
liabilities at March 31, 2010 and 2009 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2010 2009 2010
Deferred tax assets:
Write-down of inventories ¥ 5,384 ¥ 9,529 $ 57,893
Accrued expenses 9,476 11,540 101,893
Excess depreciation 4,949 6,135 53,215
Loss on impairment of property, plant and equipment 11,704 15,231 125,849
Loss on impairment of investment securities 6,289 8,720 67,624
Tax loss carryforwards 123,289 95,227 1,325,688
Others 2,946 7,392 31,677
Valuation allowance (148,153) (132,987) (1,593,043)
Total 15,884 20,787 170,796
Deferred tax liabilities:
Unrealized gain on available-for-sale securities (619) (868) (6,656)
Others (2,134) (3,055) (22,946)
Total (2,753) (3,923) (29,602)
Net deferred tax assets ¥ 13,131 ¥ 16,864 $ 141,194
Reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompany-
ing consolidated statements of operations for the years ended March 31, 2010 and 2009 was as follows:
2010 2009
Normal effective statutory tax rate (41.0)% (41.0)%
Expenses not deductible for income tax purposes 1.9 1.2
Revenue not taxable for income tax purposes 0.3 (0.4)
Difference in foreign and Japanese tax rates 0.3 (0.1)
Valuation allowance 52.5 71.7
Others—net 3.0 (0.9)
Actual effective tax rate 17.0 % 30.5 %
Net deferred tax assets for the years ended March 31, 2010 and 2009 were included in the following accounts:
Millions of Yen
Thousands of
U.S. Dollars
2010 2009 2010
Current assets:
Deferred tax assets ¥ 5,808 ¥ 7,097 $ 62,452
Investments and other assets:
Deferred tax assets 9,389 12,484 100,957
Long-term liabilities:
Other long-term liabilities (2,066) (2,717) (22,215)
42
PIONEER CORPORATION Annual Report 2010