Wacom 2004 Annual Report Download - page 22

20 Wacom Annual Report 2004
8. Research and development expenditures:
Research and development expenditures, which are charged to income when
incurred, and are included in selling, general and administrative expenses,
amounted to ¥570,186 thousand and ¥675,775 thousand ($6,397 thousand)
for the years ended March 31, 2003 and 2004, respectively.
9. Selling, general and administrative expenses:
The major components of “Selling, general and administrative expenses” are
as follows:
10. Income taxes:
Income taxes applicable to the Company include (1) corporation tax, (2)
enterprise tax and (3) inhabitants tax which, in aggregate, represent a
statutory tax rate of approximately 42%, effective from April 1, 1999.
On March 31, 2003, the Japanese National Diet approved various changes
to the calculation of the statutory local enterprise tax for companies with
capital in excess of ¥100 million, effective April 1, 2004. Under the amended
legislation, the enterprise tax will be the sum of three tax components; a) an
income based component, b) a value added component and c) a capital based
component. Prior to the amendment there was only an “income based
component”.
Concurrently, the basic tax rate for the “income based component” would
be reduced from 9.6% to 7.2%. As a result of this amendment, the tax rate
to be applied to deferred tax assets and liabilities as at March 31, 2003 for the
expected future tax consequences of temporary differences between the
carrying amounts and tax bases of assets and liabilities, that are expected to
reverse in the year beginning April 1, 2004 or later, decreased from 42.0% to
39.7%. This resulted in a reduction (increase) in deferred tax assets at March
31, 2003 and 2004 by (¥26,128 thousand) and ¥10,754 thousand, compared
with the deferred tax asset that would have been recognized if a tax rate of
42.0% had been fully applied to all temporary differences. Net income for the
years ended March 31, 2003 and 2004 also reduced (increased) by (¥24,379
thousand) and ¥10,754 thousand, respectively as a result of these changes in
statutory local enterprise tax regulations.
The significant components of deferred tax assets and liabilities for the years
ended March 31, 2003 and 2004 are as follows:
The reconciliation between the statutory tax rate and the income tax rate in
the consolidated statements of income for the years ended March 31, 2003
and 2004 are as follows:
11. Leases:
Leases that transfer substantially all the risks and rewards of ownership of the
assets are accounted for as capital leases; Leases do not transfer ownership of
the assets at the end of the lease term, are accounted for as operating leases
in accordance with accounting principles and practices generally accepted in
Japan. Certain information on such lease contracts of the Company and its
consolidated subsidiaries, as a lessee, is shown below:
(1) Finance leases, other than those which do not transfer ownership of
properties to lessees, are as follows:
a) Acquisition costs of leased assets under finance leases are as follows:
b) Future lease payments under finance leases are as follows:
c) Lease payments and amounts representing depreciation and interest are as
follows:
(2) Minimum lease payments under non-cancelable operating leases are as
follows:
Advertising expenses
Provision for allowance for doubtful accounts
Salaries
Pension expenses
Provisions for severance indemnities of directors
and statutory corporate auditors
Provisions for bonuses to employees
Others
Total
Thousands of
U.S. dollars
Year ended
March 31
2004
Thousands of yen
Year ended March 31
2003 2004
¥856,631
18,681
1,446,322
25,031
92,372
262,637
3,705,220
¥6,406,894
¥989,634
3,375
1,579,708
40,877
72,203
267,967
3,929,154
¥6,882,918
$9,368
32
14,954
387
683
2,536
37,194
$65,154
Deferred tax assets:
Foreign tax credit
Accrued expenses
Accrued retirement benefits
Accrued bonuses
Inventory-intercompany profit
Accrued severance indemnities for directors
and statutory corporate auditors
Tax loss carryforwards
Write-down of investment securities
Enterprise tax
Software development costs
Write-down of membership
Lump-sum depreciation assets
Allowance for doubtful accounts
Equity in earnings of an affiliate
Others
Gross deferred tax assets
Less - Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries
Unrealized gains on other securities
Others
Total deferred tax liabilities
Net deferred tax assets
Thousands of
U.S. dollarsThousands of yen
¥141,543
-
64,280
82,778
100,064
97,864
11,704
3,610
18,812
29,478
19,423
11,728
4,519
47,571
30,358
663,732
(154,750)
508,982
(87,078)
(6,463)
(3,409)
(96,950)
¥412,032
2003 2004 2004
¥230,439
141,875
85,638
82,674
69,110
57,722
53,889
51,181
22,986
22,155
19,423
13,902
1,430
-
38,939
891,363
(291,330)
600,033
(87,319)
(4,105)
(-)
(91,424)
¥508,609
$2,181
1,343
811
783
654
546
510
484
218
210
184
132
13
-
369
8,438
(2,758)
5,680
(826)
(39)
(-)
(865)
$4,815
Statutory effective tax rate
(Reconciliation)
Non deductible expenses for tax purposes
Equalization tax
International tax rate differences
Foreign tax credit
Valuation allowance
Effect on changes of effective tax rate
Tax credit of corporation tax
Others
Effective income tax rate
March 31,
2004
March 31,
2003
42.0%
4.7
1.2
(1.9)
(0.9)
4.2
(2.6)
-
(0.5)
46.2%
42.0%
1.5
0.8
(3.6)
10.1
1.9
1.0
(8.3)
2.4
47.8%
Machinery, equipment and vehicles
Tools and furniture
Software
Accumulated depreciation
Total
Thousands of
U.S. dollars
March 31
2004
Thousands of yen
March 31
2003 2004
¥3,714
46,163
46,240
(40,127)
¥55,990
¥3,714
23,529
46,240
(32,388)
¥41,095
$35
223
438
(307)
$389
Due within one year
Due after more than one year
Thousands of
U.S. dollars
March 31
2004
Thousands of yen
March 31
2003 2004
¥16,267
43,941
¥60,208
¥12,986
30,386
¥43,372
$123
288
$411
Due within one year
Due after more than one year
Total minimum lease payments
Thousands of
U.S. dollars
March 31
2004
Thousands of yen
March 31
2003 2004
¥8,984
12,117
¥21,101
¥11,445
24,205
¥35,650
$108
229
$337
Lease payments
Amount representing depreciation
Amount representing interest
Thousands of
U.S. dollars
March 31
2004
Thousands of yen
March 31
2003 2004
¥34,649
¥30,526
¥2,375
¥17,480
¥13,862
¥1,426
$165
$131
$13