Sony 2015 Annual Report Download - page 210

SONY CORPORATION AND CONSOLIDATED SUBSIDIARIES
The increase in the valuation allowance during the fiscal year ended March 31, 2014 was primarily due to
continuing losses at Sony Corporation and its national tax filing group in Japan and SAHI and its consolidated
tax filing group in the U.S. In addition, certain other foreign subsidiaries recorded valuation allowances against
their deferred tax assets.
The increase in the valuation allowances during the fiscal year ended March 31, 2015 was primarily due to
increasing tax credit carryforwards at SAHI and its consolidated tax filing group in the U.S. and continuing
losses at Sony Corporation and its national tax filing group in Japan.
The decrease in the valuation allowances during the fiscal year ended March 31, 2016 was primarily due to
the effect of foreign currency translation adjustments at SAHI and its consolidated tax filing group in the U.S.
and the reversal of valuation allowances for local tax purposes for certain Japanese subsidiaries based on the
weight of the available positive and negative evidence, including the strength of earnings in recent years and their
forecast of continuing profits. These decreases were partially offset by an increase in the valuation allowance for
accrued pension and severance costs in the national tax filing group in Japan.
Net deferred tax assets (net of valuation allowance) and liabilities are included in the consolidated balance
sheets as follows:
Yen in millions
March 31
2015 2016
Current assets — Deferred income taxes 47,788 40,940
Other assets — Deferred income taxes 89,637 97,639
Current liabilities — Other (6,769) (5,330)
Long-term liabilities — Deferred income taxes (445,876) (450,926)
Net deferred tax liabilities (315,220) (317,677)
At March 31, 2016, deferred income taxes have not been provided on undistributed earnings of foreign
subsidiaries and corporate joint ventures not expected to be remitted in the foreseeable future totaling
333,177 million yen, and on the gain of 61,544 million yen 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 the possible future disposition
of its investment based on its tax planning strategies.
At March 31, 2016, Sony had net operating loss carryforwards, the tax effect of which totaled
483,590 million yen, which may be available as an offset against future taxable income on tax returns to be filed
in various tax jurisdictions. With the exception of 152,986 million yen with no expiration period, substantially all
of the total net operating loss carryforwards expire at various dates between the fiscal years ending March 31,
2018 and 2024, and the remaining amounts have expiration periods up to 20 years depending on the jurisdiction.
Tax credit carryforwards at March 31, 2016 amounted to 145,011 million yen. With the exception of
21,807 million yen with no expiration period, substantially all of the total available tax credit carryforwards
expire at various dates between the fiscal years ending March 31, 2017 and 2026.
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