Pioneer 2012 Annual Report Download - page 42

10. Income Taxes
has prescribed so in its articles of incorporation.
Semiannual interim dividends may also be paid
once a year upon resolution by the board of directors
if the articles of incorporation of the company so
stipulate. The Companies Act provides certain
limitations on the amounts available for dividends or the
purchase of treasury stock. The limitation is defined as
the amount available for distribution to the shareholders,
but the amount of net assets after dividends must be
maintained at no less than ¥3 million.
b. Increases/Decreases and Transfer of
Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal
to 10% of dividends must be appropriated as an
additional paid-in capital (a component of capital
surplus) or as a legal reserve (a component of
retained earnings) depending on the equity account
charged upon the payment of such dividends until
the aggregate amount of additional paid-in capital
and legal reserve equals 25% of the common
stock. Under the Companies Act, the total amount
of additional paid-in capital and legal reserve may
be reversed without limitation. The Companies Act
also provides that common stock, legal reserve,
additional paid-in capital, other capital surplus and
retained earnings can be transferred among the
accounts under certain conditions upon resolution of
the shareholders.
c. Treasury Stock and Treasury Stock
Acquisition Rights
The Companies Act also provides for companies
to purchase treasury stock and dispose of such
treasury stock by resolution of the board of directors.
The amount of treasury stock purchased cannot
exceed the amount available for distribution to the
shareholders which is determined by a specified
formula. Under the Companies Act, stock acquisition
rights are presented as a separate component
of equity. The Companies Act also provides that
companies can purchase both treasury stock
acquisition rights and treasury stock. Such treasury
stock acquisition rights are presented as a separate
component of equity or deducted directly from stock
acquisition rights.
The Company and its Japanese subsidiaries are subject to Japanese national and local income taxes which, in the
aggregate, resulted in a statutory tax rate of approximately 41% for the years ended March 31, 2012 and 2011.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax
assets and liabilities at March 31, 2012 and 2011, were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Deferred tax assets:
Write-down of inventories ¥ 4,037 ¥ 4,193 $ 49,232
Accrued expenses 7,592 9,908 92,585
Excess depreciation 2,766 3,897 33,732
Loss on impairment of property, plant and equipment 7,418 10,432 90,463
Loss on impairment of investment securities 5,073 5,943 61,866
Tax loss carryforwards 111,932 121,792 1,365,024
Others 4,258 4,233 51,927
Valuation allowance (128,814) (148,286) (1,570,902)
Total 14,262 12,112 173,927
Deferred tax liabilities:
Unrealized gain on available-for-sale securities (377) (393) (4,598)
Others (1,278) (2,065) (15,585)
Total (1,655) (2,458) (20,183)
Net deferred tax assets ¥ 12,607 ¥ 9,654 $ 153,744
40 Pioneer Corporation Annual Report 2012