Ricoh 1999 Annual Report Download - page 44

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41
Reconciliations of the normal tax rates in Japan with the effective tax
rates for the three years ended March 31, 1999, are as follows:
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
1999
51%
5
0
(3)
3
2
1
59%
51%
3
5
(3)
5
—
(1)
60%
1997 1998 47%
(2)
0
(10)
—
8
3
46%
Permanently nondeductible expenses include directors’ bonuses and
entertainment expenses. Permanently nontaxable income includes dividends
received and exported technology fees. Effective April 1, 1999, the normal
statutory tax rate was reduced to approximately 42% and such rate has been
used in calculating the future expected tax effects of temporary differences.
The tax effect of temporary differences giving rise to the consolidated
deferred income tax assets and liabilities at March 31,1998 and 1999 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
1999
Millions of yen
19991998 $ 250,802
206,231
(12,430)
(122,570)
$ 322,033
¥ 30,347
24,954
(1,504)
(14,831)
¥ 38,966
¥ 34,918
17,129
(3,110)
(26,292)
¥ 22,645
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
1999
$ 148,504
46,496
33,124
197,421
83,719
97,438
606,702
(68,355)
$ 538,347
$ (86,868)
(49,777)
(62,074)
(17,595)
$(216,314)
$ 322,033
Millions of yen 1999
1998
¥ 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
¥ 17,969
5,626
4,008
23,888
10,130
11,790
73,411
(8,271)
¥ 65,140
¥(10,511)
(6,023)
(7,511)
(2,129)
¥(26,174)
¥ 38,966
Net deferred tax assets as of March 31, 1998 and 1999 are included in the consolidated balance sheets as follows:
The net changes in the total valuation allowance for the three years end-
ed March 31, 1999 were decreases of ¥8,655 million, ¥2,297 million and
¥5,486 million ($45,339 thousand), respectively.
The valuation allowance was established to reduce the deferred tax assets
to the amount that is expected to be realized. The valuation allowance princi-
pally relates to the tax effects of net operating losses recorded by certain sub-
sidiaries.