Sony 1999 Annual Report Download - page 67

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Sony Corporation Annual Report 1999
The significant components of deferred tax assets and
liabilities are as follows:
Yen in millions Dollars in thousands
March 31 March 31,
1998 1999 1999
Deferred tax assets:
Operating loss carryforwards for tax purposes. . . . . . . . . . . . . . ¥ 79,761 ¥ 70,120 $ 584,334
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . 54,487 61,123 509,358
Warranty reserve and accrued expenses . . . . . . . . . . . . . . . . . . 52,445 57,085 475,708
Inventory - intercompany profits and write-down . . . . . . . . . . . 38,915 39,469 328,908
Future insurance policy benefits. . . . . . . . . . . . . . . . . . . . . . . 38,686 37,393 311,608
Accrued bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,881 17,565 146,375
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,963 90,309 752,575
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . 372,138 373,064 3,108,866
Less: Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . (125,908) (122,656) (1,022,133)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . 246,230 250,408 2,086,733
Deferred tax liabilities:
Insurance acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . (67,858) (72,352) (602,933)
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . (77,833) (55,106) (459,217)
Gain on securities contribution to employee
retirement benefit trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (24,712) (205,933)
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,264) (11,265) (93,875)
Unrealized gains on securities . . . . . . . . . . . . . . . . . . . . . . . . (41,185) (11,243) (93,692)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (45,773) (59,858) (498,816)
Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . (245,913) (234,536) (1,954,466)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 317 ¥ 15,872 $ 132,267
The valuation allowance mainly relates to deferred
tax assets of consolidated subsidiaries with operating
loss carryforwards for tax purposes that are not expected
to be realized. The net changes in the total valuation
allowance for the years ended March 31, 1997 and 1998
were increases of ¥3,902 million and ¥3,650 million,
respectively, and for the year ended March 31, 1999 was
a decrease of ¥3,252 million ($27,100 thousand).
Reconciliation of the differences between the statutory
tax rate and the effective income tax rate is as follows:
Year ended March 31
1997 1998 1999
Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.0% 51.0% 48.0%
Increase (reduction) in taxes resulting from:
Income tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.8) (2.4) (1.3)
Valuation allowance recognized on current losses of subsidiaries . . . . . . . . 5.2 1.9 5.5
Changes in Japanese income tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.9) (3.6)
Decrease in deferred tax liabilities on undistributed earnings of
foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.4) (2.7) (2.9)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 0.5 2.4
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.4% 47.4% 48.1%