Significant 2012 deferred tax write downs for Japanese companies

May 31, 2012  |  Developments, News

News, information

On the 30th of May, 2012, the Nikkei Newspaper reported on the extent to which leading Japanese companies were required to mark down deferred tax assets for Japanese financial reporting purposes in the year to 31 March 2012.

The article noted that Japanese companies in the home digital market were showing the largest mark downs of their deferred tax assets with companies working on large infrastructure projects and Japanese trading companies also being significantly impacted.

Sony had the largest deferred tax asset write down of JPY296.5Bn or approximately USD3.7Bn at current exchange rates. This reflected Sony’s recent poor operating results from its flat screen televisions and difficulties in its US business.

Sharp and NEC also suffered significant deferred tax asset write downs again reflecting troubles in, respectively, their LCD television businesses and their mobile phone businesses.

The article noted that the recent decrease in Japanese tax rates was also a significant factor in contributing to deferred tax asset write downs.

NTT at the end of March 2011 reported a deferred tax asset of JPY1Tr (USD12.5Bn) so the impact of the Japanese tax rate reduction was correspondingly large.

The table below shows the amount of deferred tax asset write down and 31 March, 2012 post tax profit for the twenty largest companies concerned. Amounts are in USDm at JPY80=USD1.

Rank Company DTA write down USDm Post tax profit/loss USDm
1 Sony 3706 -5708
2 NTT 1494 5846
3 Sharp 1308 -4700
4 NEC 1243 1378
5 JX 1034 2131
6 Sojitz 515 45
7 Softbank 490 3921
8 Mazda 485 1346
9 Itochu 440 3756
10 NTT Docomo 435 5799
11 ANA 406 351
12 KDDI 376 2983
13 House 336 415
14 Daiichi Sankyo 329 129
15 JR East Japan 306 1359
16 JR Tokai 253 1659
17 Mitsubishi Chemicals 230 443
18 JR East Japan 224 368
19 Marubeni 205 2151
20 Olympus 196 611

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