Ricoh 2004 Annual Report Download - page 42

The net changes in the total valuation allowance for the years ended
March 31, 2002, 2003 and 2004 was an increase of ¥2,897 million,
decreases of ¥2,107 million and ¥183 million ($1,760 thousand),
respectively. The valuation allowance primarily relates to valuation
allowance for deferred tax assets associated with net operating loss
carryforwards incurred by certain subsidiaries. Ricoh has performed an
analysis for each of these subsidiaries to assess their ability to realize such
deferred tax assets, taking into consideration projections for future taxable
income, historical performance, tax planning strategies market conditions
and other factors, as appropriate. Considering these factors, management
believes it is more likely than not that these subsidiaries will realize their
respective deferred tax assets (principally net operating loss carry forwards)
net of existing valuation allowance.
In assessing the realizability of deferred tax assets, Ricoh considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods
in which those temporary differences become deductible. Ricoh considers
the scheduled reversal of deferred tax liabilities, projected future taxable
income, and tax planning strategies in making this assessment. Based upon
the level of historical taxable income and projections for future taxable
income over the periods in which the deferred tax assets are deductible,
Ricoh believes it is more likely than not that the benefits of these deductible
differences, net of the existing valuation allowance will be realized. The
amount of the deferred tax asset considered realizable, however, would be
reduced if estimates of future taxable income during the carryforward
period are reduced.
As of March 31, 2004, certain subsidiaries had net operating losses
carried forward for income tax purposes of approximately ¥28,155 million
($270,721 thousand) which were available to reduce future income taxes, if
any. Approximately ¥19,417 million ($186,702 thousand) of the operating
losses expire within a five-year period while the remainder principally have
an indefinite carryforward period.
41
Thousands of
U.S. dollars
2004
$186,144
476,856
$663,000
Borrowings, principally from banks
Commercial paper
Millions of yen
2004
¥19,359
49,593
¥68,952
¥28,258
56,220
¥84,478
2003
Weighted average
interest rate
2004
1.7 %
0.8
1.8%
0.9
2003
9. SHORT-TERM BORROWINGS
Short-term borrowings as of March 31, 2003 and 2004 consist of the following:
The Company and certain of its subsidiaries enter into the contracts with
financial institutions regarding lines of credit and overdrawing. Those same
financial institution hold the issuing programs of commercial paper and
medium-term notes. Unused lines of credit amounted to ¥613,884 million
and ¥634,273 million ($6,098,779 thousand) as of March 31, 2003 and
2004, respectively, of which ¥234,704 million and ¥182,764 million
($1,757,346 thousand) related to commercial paper and ¥144,280 million
and ¥131,966 million ($1,268,904 thousand) related to medium-term notes
programs at prevailing interest rates.