Nintendo 2016 Annual Report Download - page 50

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- 48 -
Income taxes
1. Significant components of deferred tax assets and liabilities
Previous fiscal year
(As of March 31, 2015)
Current fiscal year
(As of March 31, 2016)
Deferred tax assets
Research and development expenses ¥ 33,806 million ¥ 30,714 million U.S.$ 271 million
Operating loss carryforwards for tax purposes 16,546 14,844 131
Net defined benefit liability 9,508 8,546 75
Accounts payable - other and accrued expenses 7,987 7,518 66
Revenue recognition for tax purposes 5,080 4,427 39
Unrealized intra-group profit and write-downs on
inventory 11,005 3,923 34
Other 19,002 15,972 141
Deferred tax assets subtotal 102,936 85,947 760
Valuation allowance (35,171) (28,094) (248)
Total deferred tax assets 67,765 57,852 511
Deferred tax liabilities
Undistributed retained earnings of subsidiaries
and associates (6,827) (6,864) (60)
Valuation difference on available-for-sale
securities (7,077) (5,514) (48)
Other (8,502) (6,680) (59)
Total deferred tax liabilities (22,406) (19,059) (168)
Net deferred tax assets ¥ 45,359 ¥ 38,792 U.S.$ 343
2. Significant factors in the difference between the statutory tax rate and effective tax rate
Previous fiscal year
(As of March 31, 2015)
Current fiscal year
(As of March 31, 2016)
Statutory tax rate 35.5% 33.0%
(Reconciliations)
Effect of unrecognized tax effect on unrealized gains - 11.2
Decrease in deferred tax assets due to change in statutory tax
rate 6.0 8.1
Different tax rates applied to the consolidated subsidiaries (0.4) 1.8
Foreign tax credit on retained earnings of the overseas
consolidated subsidiaries (0.2) 0.4
Special deduction applied to the gross research and
development expenses (1.6) -
Valuation allowances 2.0 (20.0)
Other 0.7 5.9
Effective tax rate after tax effect accounting 41.9 40.4
3. Amendment to deferred tax assets and liabilities due to change in corporation tax rates
As “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 15 of 2016) and “Act for Partial Amendment
of the Council Tax Act, etc.” (Act No. 13 of 2016) were enacted by the Diet on March 29, 2016, the effective
statutory tax rate used to measure deferred tax assets and liabilities was changed from 32.2% to 30.8% for
temporary differences expected to be eliminated in the fiscal year beginning on April 1, 2016 and on April 1, 2017
and to 30.5% for temporary differences expected to be eliminated in the fiscal year beginning on and after April 1,
2018.
As a result, deferred tax assets after offsetting deferred tax liabilities decreased by 1,972 million yen (U.S.$17
million) and valuation difference on available-for-sale securities increased by 267 million yen (U.S.$2 million).
Income taxes-deferred increased by 2,240 million yen (U.S.$19 million).