Wacom 2012 Annual Report Download - page 21

17. Income taxes:
(1) Significant components of deferred tax assets and
liabilities
(Note 1) Net deferred tax assets are expressed in
Consolidated Balance Sheet for the years ended
March 31, 2011 and 2012 as follows.
(Note 2) The Company has changed the timing of rev-
enue recognition for the Company’ s standard prod-
ucts to recognize revenue at the point of arrival at the
customer’ s location rather than upon shipment from
the beginning of fiscal year ended March 31, 2012.
The change has been retroactively applied to the
financial statements for the year ended March 31,
2011.
Statutory effective tax rate
Tax credit of corporation tax
Taxes on undistributed earnings of overseas
Subsidiaries
Non deductible expenses for tax purposes
Equalization tax
Difference in foreign subsidiaries tax rate
Adjustment of prior year income taxes
related to transfer price
Others
Effective income tax rate
39.7%
(3.2)
(1.0)
0.6
0.4
(2.1)
(1.8)
0.8
33.4%
March 31, 2011
(2)Reconciliation between the statutory tax rate and
the effective income tax rate
The reconciliation between the statutory tax rate and
the effective income tax rate in the consolidated
statements of income for the year ended March 31,
2012 is omitted because the difference of both rates
is less than 5% of statutory effective tax rate.
(3)Adjustments of deferred tax assets and liabilities
amounts according to the change of income tax rate
On December 2, 2011, “Amendment to Income Tax
Laws to Reform Tax Rates Corresponding to the
Change in Social Economy Structures” (Law Number
114) and “Special Measures to Secure Financial Re-
sources to Implement the Restoration from 2011
Tohoku Earthquake” (Law Number 117) were issued
and, effective from the fiscal years beginning April 1,
2012, the corporate income taxes was consequently
reduced whereas temporary special purpose tax was
added on for the recovery from the earthquake
damage.
Accordingly, for estimating deferred tax assets and
liabilities, the effective tax rates to be applied on the
temporary differences expected to be settled in the
three fiscal years beginning April 1, 2012 and from the
fiscal years beginning April 1, 2015 will be reduced to
37.1% and 34.8%, respectively, from the current
effective tax rate of 39.7%.
This tax rate change resulted in the net deferred tax
assets (net of deferred tax liabilities) to be decreased
by ¥80,737 thousand ($982 thousand), income
taxes-deferred increased by ¥81,371 thousand ($990
thousand), and valuation difference on available-for-
sale securities increased by ¥634 thousand ($8 thou-
sand).
39
Thousands of yen Thousands of
U.S. dollars
¥226,677
71,078
87,462
186,827
44,611
156,933
18,035
51,771
12,671
41,379
11,965
18,212
98,414
27,380
1,053,415
(464,894)
(46,860)
(2,490)
(514,244)
¥539,171
¥521,406
205,163
200,834
177,918
149,484
130,464
86,619
51,201
31,527
20,166
15,773
15,082
83,514
-
1,689,151
(547,422)
(59,126)
(7,381)
(613,929)
¥1,075,222
$6,344
2,496
2,444
2,165
1,819
1,587
1,054
623
384
245
192
183
1,016
-
20,552
(6,660)
(719)
(91)
(7,470)
$13,082
2011 2012 2012
Deferred tax assets:
Inventory-inter-company profit
Accrued expenses
Accrued bonuses
Accrued retirement benefits
Software development costs
Accrued severance indemnities for
directors and statutory corporate auditors
Enterprise tax
Account receivables
Share-based compensation expenses
Inventories
Accrued vacation payable
Net loss carried forward for tax purposes
Others
Accounting Policy Change in
Revenue Recognition (Note 2)
Total deferred tax assets
Deferred tax liabilities:
Undistributed earnings of
overseas subsidiaries
Fixed assets of overseas
subsidiaries
Others
Total deferred tax liabilities
Net deferred tax assets(Note 1)
Thousands of yen Thousands of
U.S. dollars
¥548,328
23,815
(2,491)
(30,481)
¥1,107,663
13,786
-
(46,227)
$13,477
168
-
562
2011 2012 2012
Current assets –Deferred tax assets
Noncurrent assets –Deferred tax assets
Current liabilities –Deferred tax liabilities
Noncurrent liabilities –Deferred tax liabilities
18. Asset retirement obligations:
Information regarding asset retirement obligations
recognized in the consolidated balance sheets is as
follows.
(1)Overview of asset retirement obligation -
Asset retirement obligations mainly consist of restitu-
tion costs associated with the office rental contract of
Tokyo branch office.
(2)Method to calculate asset retirement obligations -
Amount of asset retirement obligations is calculated
by using the following assumptions.
(a) Expected duration of use Mainly 15 years from acquisition
(b)Discount rate 1.391%
(3)Increase and decrease of asset retirement obliga-
tions -
Increase and decrease of the amount of asset retire-
ment obligations during the year ended March 31,
2011 and 2012 is as follows.
Note: Balance at the beginning of current period is the
balance as of the beginning of the year ended March
31, 2011 adjusted by adopting “Accounting Standards
for Asset Retirement Obligations” (Accounting Stan-
dards Board of Japan Statement No. 18 issued on
March 31, 2008) and “Guidance on Accounting Stan-
dards for Asset Retirement Obligations” (Accounting
Standards Board of Japan Guidance No. 21 issued on
March 31, 2008).
(4)Change in estimation of asset retirement obliga-
tions -
During the year ended March 31, 2012 the Company
made the decision to transfer its Tokyo branch office.
Accordingly the company recalculated the estimation
of restitution cost to reflect the change in the period
of the restitution. The amount of ¥26,964 thousand
($329 thousand) consequently increased in the
change of the estimation is included in asset retire-
ment obligations as “Increase by the change in esti-
mation ”.
19. Segment information:
(1)Segment information -
(a)Overview of reportable segments
The Company’ s reportable segments represent com-
ponents of the company for which separate financial
information is available and the board of directors
reviews on a regular basis in determining how to allo-
cate the Company’ s resources and evaluate perfor-
mance.
The Company establishes business units by product
and service and each business unit develops compre-
hensive domestic and overseas strategies about the
products and services.
Accordingly, the Company’ s operations comprise
segments which are separated by product and ser-
vice based on the business unit and has 2 reportable
segments: Tablet business and Component business.
Tablet business and Component business are
engaged in development, manufacture and sales of
the following products, respectively.
i)Tablet business: Tablets and related software
ii)Component business: Components and modules
(Electronic pen, multi-touch sensor, touch panel etc.)
(b)Methods for calculating the amounts of net sales,
operating income (loss), assets and other items by
reportable segment
The accounting for reportable segments is the same
as specified in “Summary of significant accounting
policies”.
(c) Information regarding net sales, operating income
(loss), assets and other items by reportable segment
for the year ended March 31, 2011 and 2012 are as
follows:
Thousands of yen
Year ended March 31, 2011
Net sales:
(1)Outside customers
(2)Inter-segment
Total
Operating income (loss):
Assets:
Other items:
Depreciation
Amortization of goodwill
Increase or decrease of
property, plant and
equipment and
intngible assets
¥26,465,928
-
¥26,465,928
¥5,629,951
¥13,910,839
¥503,744
-
861,273
¥ 6,117,18 4
-
¥ 6,117,18 4
(¥235,864)
¥3,890,013
¥78,513
21,536
54,938
¥32,583,112
-
¥32,583,112
¥5,394,087
¥17,800,852
¥582,257
21,536
916,211
¥33,030,359
-
¥33,030,359
¥3,252,086
¥27,093,503
¥727,837
21,536
1,590,906
¥33,030,359
-
¥33,030,359
¥5,244,012
¥18,167,591
¥624,391
21,536
938,279
¥447,247
-
¥447,247
(¥150,075)
366,739
¥42,134
-
22,068
¥-
-
¥-
(¥1,991,926)
¥8,925,912
¥103,446
-
652,627
Reportable segments
Tablet Component Total
Others
(Note a) Total
Adjustments
(Note b)
Consolidated
(Note c)
40
Thousands of
yen
Thousands of
U.S. dollars
Balance at the beginning of
current period (Note)
Increase by the acquisition of
property, plant and equipment
Interest expenses
Increase by the change in
estimation
Others
Balance at the end of current
period
¥48,596
-
715
26,964
20
¥76,295
$591
-
9
329
0
$929
2011
Thousands of
yen
¥45,585
2,309
702
-
-
¥48,596
2011 2011