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48 TOSHIBA Annual Report 2013
Toshiba Corporation and Subsidiaries
March 31, 2013
Notes to Consolidated Financial Statements
14. RESEARCH AND DEVELOPMENT COSTS
Research and development costs are expensed as incurred and amounted to ¥305,919 million ($3,254,457 thousand) and
¥319,863 million for the years ended March 31, 2013 and 2012, respectively.
15. ADVERTISING COSTS
Advertising costs are expensed as incurred and amounted to ¥30,671 million ($326,287 thousand) and ¥33,748 million for
the years ended March 31, 2013 and 2012, respectively.
16. OTHER INCOME AND OTHER EXPENSE
FOREIGN EXCHANGE GAINS AND LOSSES
For the years ended March 31, 2013 and 2012, the net foreign exchange impacts were ¥8,242 million ($87,681 thousand)
gain and ¥15,915 million loss, respectively.
GAINS AND LOSSES ON SALES OR DISPOSAL OF FIXED ASSETS
For the years ended March 31, 2013 and 2012, the sale and disposal of fixed assets resulted in net gains of ¥5,054 million
($53,766 thousand) and ¥3,445 million, respectively. Gains on sales of fixed assets were ¥19,124 million ($203,447
thousand), and losses on disposal of fixed assets were ¥14,070 million ($149,681 thousand) for the year ended March 31,
2013. Gains on sales of fixed assets were ¥24,275 million, and losses on disposal of fixed assets were ¥20,830 million for
the year ended March 31, 2012.
GAINS AND LOSSES ON SALES OF THE SHARES OF TOSHIBA MOBILE DISPLAY CO., LTD.
In November 2011, the Company, Innovation Network Corporation of Japan (“INCJ”), Hitachi, Ltd. and Sony Corporation
signed definitive agreements to integrate their small- and medium-sized display businesses. The Company, INCJ and a
new company (currently called Japan Display Inc. (“JDI”)) also signed agreements to transfer all of the issued shares of
Toshiba Mobile Display Co., Ltd. (“TMD”) to JDI. In March 2012, the Company sold all of the issued shares of TMD to JDI and
acquired 10% of the shares of JDI. Gains and losses on these transactions were not significant.
LOSSES ON SALES OF THE SHARES OF TOSHIBA FINANCE CO., LTD.
In April 2013, the Company entered into a definitive agreement to transfer all of the issued shares of Toshiba Finance Co.,
Ltd. (“TFC”) to AEON Financial Services Co., Ltd. (“AFS”) . In May 2013, the Company sold all of the issued shares of TFC to
AFS. Losses on the transaction of ¥14,780 million ($157,234 thousand) were recorded for the year ended March 31, 2013.
17. IMPAIRMENT OF LONG-LIVED ASSETS
Due to a decrease in demand and price declines, the Group recorded impairment loss of ¥8,684 million ($92,383
thousand) related to the property, plant and equipment, and finite-lived intangible assets of the Visual Products business
for the year ended March 31, 2013. The impairment loss is included in other expense in the accompanying consolidated
statements of income, and is related to Digital Products. The amount of impairment losses was not significant for the year
ended March 31, 2012.
18. INCOME TAXES
The Group is subject to a number of different income taxes which, in the aggregate, result in an effective statutory tax
rate in Japan of approximately 38.0 percent and 40.7 percent for the years ended March 31, 2013 and 2012, respectively.
Amendments to the Japanese tax regulations were enacted into law on November 30, 2011. As a result of these
amendments, the effective statutory tax rate used to calculate deferred tax assets and liabilities was changed from 40.7
percent to 38.0 percent for temporary difference expected to be eliminated during the period from the fiscal year
beginning on April 1, 2012 to the fiscal year beginning on April 1, 2014, and 35.6 percent for temporary difference
expected to be eliminated in and after the fiscal year beginning on April 1, 2015. The effect of re-evaluation of deferred
tax assets and liabilities for this change in the tax rate was reflected in income taxes in the consolidated statement of
income for the year ended March 31, 2012.
A reconciliation table between the reported income tax expense and the amount computed by multiplying the income
from continuing operations, before income taxes and noncontrolling interests by the applicable statutory tax rate is as
follows: