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The Right Way Forward Business OverviewPerformance Overview Financial Section
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Annual Report 2009 83
U.S. dollars
Yen in millions in millions
For the year ended
For the years ended March 31, March 31,
2007 2008 2009 2009
Valuation allowance at beginning of year ........................................................ ¥ 93,629 ¥ 95,225 ¥ 82,191 $ 837
Additions ......................................................................................................... 16,967 4,783 145,707 1,483
Deductions ...................................................................................................... (20,429) (13,508) (3,511) (36)
Other ................................................................................................................ 5,058 (4,309) (15,760) (160)
Valuation allowance at end of year ................................................................... ¥ 95,225 ¥ 82,191 ¥208,627 $2,124
The other amount includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest
and currency translation adjustments during the years ended March 31, 2007, 2008 and 2009.
The deferred tax assets and liabilities that comprise the net deferred tax asset (liability) are included in the consolidated balance
sheets as follows:
U.S. dollars
Yen in millions in millions
March 31, March 31,
2008 2009 2009
Deferred tax assets
Deferred income taxes (Current assets) ................................................................................... ¥ 563,220 ¥ 605,331 $ 6,162
Investments and other assets—other ...................................................................................... 111,477 149,511 1,523
Deferred tax liabilities
Other current liabilities .............................................................................................................. (6,954) (13,863) (141)
Deferred income taxes (Long-term liabilities) ......................................................................... (1,099,006) (642,293) (6,539)
Net deferred tax asset (liability) ............................................................................................ ¥ (431,263) ¥ 98,686 $ 1,005
Because management intends to reinvest undistributed earn-
ings of foreign subsidiaries to the extent not expected to be
remitted in the foreseeable future, management has made no
provision for income taxes on those undistributed earnings
aggregating ¥2,363,721 million ($24,063 million) as of March 31,
2009. Toyota estimates an additional tax provision of ¥89,119 mil-
lion ($907 million) would be required if the full amount of those
undistributed earnings were remitted.
Operating loss carryforwards for tax purposes attributed to
consolidated subsidiaries as of March 31, 2009 were approxi-
mately ¥811,588 million ($8,262 million) and are available as an
offset against future taxable income of such subsidiaries. The
majority of these carryforwards expire in years 2010 to 2029.
The valuation allowance mainly relates to deferred tax assets
of the consolidated subsidiaries with operating loss carryfor-
wards for tax purposes that are not expected to be realized. The
net changes in the total valuation allowance for deferred tax
assets for the years ended March 31, 2007, 2008 and 2009 con-
sist of the following:
Toyota adopted FIN 48 on April 1, 2007. A summary of the gross unrecognized tax benefits changes for the years ended March 31,
2008 and 2009, is as follows:
U.S. dollars
Yen in millions in millions
For the year ended For the year ended
March 31, March 31,
2008 2009 2009
Balance at beginning of year ........................................................................................................ ¥29,639 ¥ 37,722 $ 384
Additions (reductions) based on tax positions related to the current year .............................. (424) 858 8
Additions for tax positions of prior years ................................................................................... 25,954 35,464 361
Reductions for tax positions of prior years .................................................................................. (8,771) (24,061) (245)
Reductions for tax positions related to lapse of statute of limitations ..................................... (30) (114) (1)
Reductions for settlement ............................................................................................................. (4,618) (128) (1)
Other............................................................................................................................................... (4,028) (2,938) (30)
Balance at end of year ............................................................................................................... ¥37,722 ¥ 46,803 $ 476
The amount of unrecognized tax benefits that, if recognized,
would affect the effective tax rate was not material at March 31,
2008 and 2009, respectively. Toyota does not believe it is reason-
ably possible that the total amounts of unrecognized tax bene-
fits will significantly increase or decrease within the next twelve
months.