Sharp 2006 Annual Report Download - page 45

SHARP ANNUAL REPORT 2006 44
The following table summarizes the significant differences between the normal tax rate and the effective tax rate for financial statement purposes
for the year ended March 31, 2006:
Deferred tax assets:
Inventories.....................................................................................................
Allowance for doubtful receivables ................................................................
Accrued bonuses .........................................................................................
Warranty reserve ...........................................................................................
Software .......................................................................................................
Long-term prepaid expenses ........................................................................
Enterprise taxes ............................................................................................
Other.............................................................................................................
Gross deferred tax assets .....................................................................
Deferred tax liabilities:
Retained earnings appropriated for tax allowable reserves ............................
Undistributed earnings of overseas subsidiaries ............................................
Net unrealized holding gains on securities .....................................................
Other.............................................................................................................
Gross deferred tax liabilities...................................................................
Net deferred tax assets .....................................................................................
$ 140,181
20,345
108,638
16,405
246,517
114,845
21,431
281,655
950,017
(108,422)
(28,448)
(167,164)
(21,345)
(325,379)
$ 624,638
¥ 16,261
2,360
12,602
1,903
28,596
13,322
2,486
32,672
110,202
(12,577)
(3,300)
(19,391)
(2,476)
(37,744)
¥ 72,458
¥ 14,461
1,942
12,449
1,608
25,362
13,308
2,405
35,738
107,273
(9,997)
(2,592)
(9,229)
(3,223)
(25,041)
¥ 82,232
200620062005
Yen
(millions) U.S. Dollars (thousands)
Significant components of deferred tax assets and deferred tax liabilities as of March 31, 2005 and 2006 were as follows:
Normal tax rate..............................................................................................................................................................
Tax credit.................................................................................................................................................................
Differences in normal tax rates of overseas subsidiaries............................................................................................
Dividend income ......................................................................................................................................................
Undistributed earnings of overseas subsidiaries .......................................................................................................
Expenses not deductible for tax purposes and other................................................................................................
Effective tax rate............................................................................................................................................................
40.6 %
(6.8)
(2.0)
2.1
0.5
1.8
36.2 %
2006
4. Income Taxes
The Company is subject to a number of different income taxes which,
in the aggregate, indicate a normal tax rate in Japan of approximately
40.6% for the years ended March 31, 2005 and 2006.
The Company and the wholly owned domestic subsidiaries have
adopted the consolidated tax return system of Japan.
The difference between the normal tax rate on income before income
taxes and minority interests and the effective tax rate for financial state-
ment purposes for the year ended March 31, 2005 was immaterial, which
was due primarily to expenses not deductible for tax purposes and dif-
ferences in normal tax rates of overseas subsidiaries.
Other current assets..........................................................................................
Prepaid expenses and other..............................................................................
Other long-term liabilities...................................................................................
Net deferred tax assets .....................................................................................
$ 417,405
218,086
(10,853)
$ 624,638
¥ 48,419
25,298
(1,259)
¥ 72,458
¥ 44,579
38,101
(448)
¥ 82,232
Net deferred tax assets and liabilities as of March 31, 2005 and 2006 were included in the consolidated balance sheets as follows:
200620062005
Yen
(millions) U.S. Dollars (thousands)