Wacom 2006 Annual Report Download - page 29

W acom Co., Ltd. Annual Report 2006 28
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, amount to ¥735,476 thousand and
¥773,046 thousand ($6,580 thousand) for the years ended March
31, 2005 and 2006, 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 39.7%, for the
years ended March 31, 2005 and 2006.
The significant components of deferred tax assets and liabilities for
the years ended March 31, 2005 and 2006 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, 2005 and 2006 is as follows:
Statutory effective tax rate
(Reconciliation)
N on deductible expenses for tax purposes
Equalization tax
International tax rate differences
Foreign tax credit
Valuation allowance
Tax credit of corporation tax
O thers
Effective income tax rate
39.7%
0.7
0.3
(0.7)
–
–
(2.4)
(0.7)
36.9%
39.7%
1.4
0.6
(1.7)
7.9
2.1
(5.0)
–
45.0%
March 31,
2006
March 31,
2005
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
O thers
Total
¥912,798
6,536
1,638,268
55,507
99,787
248,104
4,124,350
¥7,085,350
¥1,095,727
19,573
1,904,750
64,780
63,401
442,507
4,955,659
¥8,546,397
$9,328
167
16,215
551
540
3,767
42,186
$72,754
Thousands of
U.S. dollars
Thousands of yen
Year ended March 31
2005 2006 2006
Year ended
March 31
D eferred tax assets:
Foreign tax credit
Accrued expenses
Accrued retirement benefits
Accrued bonuses
Inventory-intercompany profit
Accrued severance indemnities for
directors and statutory corporate auditors
W rite-down of investment securities
Enterprise tax
Software development costs
Lump- sum depreciation assets
O thers
Gross deferred tax assets
Less-Valuation allowance
Total deferred tax assets
D eferred tax liabilities:
Undistributed earnings of overseas
subsidiaries
Unrealized gains on other securities
Total deferred tax liabilities
N et deferred tax assets
¥233,099
19,164
99,877
66,729
97,190
67,062
51,181
38,490
21,520
14,560
20,803
729,675
(233,099)
496,576
(111,636)
(12,480)
(124,116)
¥372,460
¥115,655
33,100
113,728
106,264
95,837
86,992
44,966
36,460
40,698
17,470
14,026
705,196
(115,655)
589,541
(184,372)
–
(184,372)
¥405,169
$984
282
968
905
816
741
383
310
346
149
119
6,003
(985)
5,018
(1,569)
–
(1,569)
$3,449
Thousands of
U.S. dollars
Thousands of yen
2005 2006 2006
11. Leases:
Leases that transfer substantially all the risks and rewards of
ownership of the assets are accounted for as capital leases; leases
that 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 subsidiaries, as a lessee, is shown below:
(1) Capital leases, which do not transfer ownership of the assets to
the lessee, are as follows:
a) Acquisition costs of leased assets under capital leases are as follows:
c) Lease payments and amounts representing depreciation and interest
are as follows:
Machinery, equipment and vehicles
Tools and furniture
Software
Accumulated depreciation
Total
¥8,021
27,825
46,240
(37,384)
¥44,702
¥8,021
24,434
46,240
(45,056)
¥33,639
$68
208
393
(383)
$286
Thousands of
U.S. dollars
Thousands of yen
March 31
2005 2006 2006
March 31
D ue within one year
D ue after more than one year
¥15,264
32,432
¥47,696
¥14,803
23,924
¥38,727
$126
203
$329
Thousands of
U.S. dollars
Thousands of yen
March 31
2005 2006 2006
March 31
b) Future lease payments under capital leases are as follows:
Lease payments
Amount representing depreciation
Amount representing interest
¥15,665
¥14,430
¥821
¥15,506
¥16,501
¥585
$132
$140
$5
Thousands of
U.S. dollars
Thousands of yen
March 31
2005 2006 2006
March 31