Ricoh 1998 Annual Report Download - page 44

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42
Normal tax rate
Permanently nondeductible expenses,
net of nontaxable income
Tax benefits not recognized on operating
losses of certain consolidated subsidiaries
Decrease in the beginning-of-the-year
balance of the valuation allowance
for deferred tax assets
Nondeductible goodwill impairment loss
Effect of change in enacted tax rate
Other, net
Effective tax rate
1998
51%
3
5
(3)
5
—
(1)
60%
51%
5
2
—
—
—
(3)
55%
1996 1997
51%
5
0
(3)
3
2
1
59%
The net changes in the total valuation allowance for the years ended
March 31, 1996, 1997 and 1998 were an increase of ¥15,324 million, a de-
crease of ¥8,655 million and a decrease of ¥2,297 million ($17,402
thousand), respectively.
The valuation allowance was established to reduce the deferred tax
Permanently nondeductible expenses include directors’ bonuses and
entertainment expenses. Permanently nontaxable income includes
dividends received and exported technology fees.
The tax effect of temporary differences giving rise to the consolidated
deferred income tax assets and liabilities at March 31, 1997 and 1998 are
as follows:
Deferred income taxes (Current Assets)
Lease deposits and other
Accrued expenses and other
Deferred income taxes (Long-Term Liabilities)
Thousands of
U.S. dollars
1998
Millions of yen
19981997
$ 264,530
129,765
(23,560)
(199,182)
$ 171,553
¥ 34,918
17,129
(3,110)
(26,292)
¥ 22,645
¥ 33,058
8,431
(271)
(33,267)
¥ 7,951
Assets:
Intercompany profits and inventory write-downs
Accrued expenses
Deferred charges
Estimated retirement allowances
Net operating losses carryforward
Other
Less—Valuation allowance
Liabilities:
Sales-type leases
Undistributed earnings of foreign subsidiaries and affiliates
Net unrealized holding gains on available-for-sale securities
Other
Net deferred tax assets
Thousands of
U.S. dollars
1998
$ 153,788
51,114
34,288
156,583
106,871
63,356
566,000
(104,220)
$ 461,780
$ (98,462)
(45,068)
(91,962)
(54,735)
$ (290,227)
$ 171,553
Millions of yen
1998
1997
¥ 19,381
9,711
5,164
15,313
18,770
7,641
75,980
(16,054)
¥ 59,926
¥ (17,220)
(7,905)
(20,041)
(6,809)
¥ (51,975)
¥ 7,951
¥ 20,300
6,747
4,526
20,669
14,107
8,363
74,712
(13,757)
¥ 60,955
¥(12,997)
(5,949)
(12,139)
(7,225)
¥(38,310)
¥ 22,645
Net deferred tax assets as of March 31, 1997 and 1998 are included in the consolidated balance sheets as follows:
assets to the amount that is expected to be realized. The valuation
allowance principally relates to the tax effects of net operating losses
recorded by certain subsidiaries.
At March 31, 1998, certain subsidiaries had net operating losses
carried forward for income tax purposes of approximately ¥38,477 million