Toshiba 2004 Annual Report Download - page 60

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58
The Company’s pension and severance plan asset allocations at March 31, 2004 and 2003, by asset category are as
follows:
March 3 1 2004 2003
Asset category
Equity securities 62% 27%
Debt securities 28% 45%
Life insurance company general accounts 4% 25%
Other 6% 3%
Total 100 % 100%
The Company’s investment policies and strategies are to assure adequate plan assets to provide for future payments of
pension and severance benefits to participants, with reasonable risks. The Company designs the basic target allocation
of the plan assets to mirror the best portfolio based on estimation of mid-term and long-term return on the investments.
The Company periodically reviews the actual return on the investments and adjusts the portfolio to achieve the
assumed long-term rate of return on the investments. The Company targets its investments in equity securities at 40
percent or more of total investments, and investments in equity and debt securities at 75 percent or more of total
investments.
The accumulated benefit obligations for all domestic defined benefit plans were ¥1,199,933 million
($11,320,123 thousand) and ¥1,783,972 million at March 31, 2004 and 2003, respectively.
11. RESEARCH AND DEVELOPMENT EXPENSES
Research and development costs are expensed as incurred and amounted to ¥336,714 million ($3,176,547 thousand)
and ¥331,494 million for the years ended March 31, 2004 and 2003, respectively.
12. ADVERTISING COSTS
Advertising costs are expensed as incurred. Advertising expenses amounted to ¥40,156 million ($378,830 thousand)
and ¥41,911 million for the years ended March 31, 2004 and 2003, respectively.
13. FOREIGN EXCHANGE GAINS AND LOSSES
For the years ended March 31, 2004 and 2003, the net foreign exchange losses are ¥2,183 million ($20,594
thousand) and ¥15,614 million, respectively.
14. IMPAIRMENT OF LONG-LIVED ASSETS
Due to general price erosion and severe market competition, the Company recorded impairment charges of ¥10,018
million ($94,509 thousand) related to the manufacturing facilities of the lithium-ion rechargeable battery business,
and ¥7,815 million related to the manufacturing facilities of the Display Devices and Components division for the
years ended March 31, 2004 and 2003, respectively. These impairment charges are included under the caption Other
expense in the accompanying consolidated statements of income.
15. INCOME TAXES
For the year ended March 31, 2004, the Company was permitted to file consolidated tax returns in Japan. In
connection therewith, a temporary surtax of 2.0% was assessed for the years ended March 2004. As a result of the
surtax, and certain changes in the corporate tax rate, the Company’s normal statutory tax rate changed from 42.1% to
43.9% for the year ended March 31, 2004 and to 40.7% for the years ending on or after March 31, 2005.
A reconciliation between the reported income tax expense and the amount computed by multiplying the income
before income taxes, minority interest and equity in (loss) earnings of affiliates by the applicable statutory tax rate is as
follows: