Sony 2000 Annual Report Download - page 87

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SONY CORPORATION ANNUAL REPORT 2000
85
Yen in millions Dollars in millions
March 31 March 31,
1999 2000 2000
Deferred tax assets:
Operating loss carryforwards for tax purposes . . . . . . . . . . . . ¥ 70,120 ¥ 63,761 $ 602
Accrued pension and severance costs. . . . . . . . . . . . . . . . . . . 61,123 63,490 599
Warranty reserve and accrued expenses . . . . . . . . . . . . . . . . . 57,085 61 ,049 576
Inventory—intercompany profits and write-down . . . . . . . . . . 39,469 45,293 427
Future insurance policy benefits . . . . . . . . . . . . . . . . . . . . . . . 37,393 40,774 385
Accrued bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,565 1 9,91 2 1 88
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,309 95,261 898
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . 373,064 389,540 3,675
Less: Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . (122,656) (1 1 2,1 91 ) (1,058)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,408 277,349 2,61 7
Deferred tax liabilities:
Insurance acquisition costs. . . . . . . . . . . . . . . . . . . . . . . . . . . (72,352) (86,873) (820)
Undistributed earnings of foreign subsidiaries. . . . . . . . . . . . . (55,106) (60,51 8) (571)
Intangible assets acquired through exchange offerings . . . . . . — (45,872) (433)
Unrealized gains on securities . . . . . . . . . . . . . . . . . . . . . . . . (11,243) (35,437) (334)
Gain on securities contribution to employee
retirement benefit trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24,712) (23,097) (21 8)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (71,123) (55,778) (526)
Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . (234,536) (307,575) (2,902)
Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . ¥ 15,872 ¥ (30,226) $ (285)
At March 31, 2000, no deferred income taxes have
been provided on undistributed earnings of foreign
subsidiaries not expected to be remitted in the foresee-
able future totaling ¥408,061 million ($3,850 million),
and on the gain of ¥61,544 million on a subsidiary’s
sale of stock arising from the issuance of common stock
of Sony Music Entertainment (Japan) Inc. in a public
offering to third parties in November 1991, as Sony
does not anticipate any significant tax consequences on
possible future disposition of its investment based on
its tax planning strategies. The unrecognized deferred
tax liabilities as of March 31, 2000 for such temporary
differences amounted to ¥92,268 million ($870 million).
The significant components of deferred tax assets and
liabilities are as follows:
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 year ended March 31, 1998 was an
increase of ¥3,650 million, and for the years ended
March 31, 1999 and 2000 were decreases of ¥3,252
million and ¥10,465 million ($99 million), respectively.
During the year ended March 31, 2000, approximately
¥17,700 million ($167 million) of tax benefits have been
realized through utilization of operating loss carryfor-
wards.
Net deferred tax assets (liabilities) are included in the
consolidated balance sheets as follows:
Yen in millions Dollars in millions
March 31 March 31,
1999 2000 2000
Current assets—Deferred income taxes . . . . . . . . . . . . . . . . . . . ¥ 102,588 ¥ 1 1 7,258 $ 1,106
Other assets—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,483 42,852 404
Current liabilities—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,377) (6,316) (59)
Long-term liabilities—Deferred income taxes . . . . . . . . . . . . . . . (120,822) (1 84,020) (1,736)
Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . ¥ 15,872 ¥ (30,226) $ (285)