Issue of Annual Report 2010

The significant components of deferred tax assets and liabilities at December 31, 2010 and 2009 were as follows:
Millions of yen
Thousands of
U.S. dollars (Note 1)
2010 2009 2010
Deferred tax assets:
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 6,540 ¥ 7,915 $ 80,302
Employees’ retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,472 4,247 42,636
Gift coupon income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,527 1,285 31,023
Tax loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,970 5,594 24,195
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,568 1,353 19,255
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,338 2,541 16,435
Accrued bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830 662 10,193
Allowance for doubtful receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 673 759 8,275
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,710 2,135 33,282
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,630 26,490 265,597
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,250) (9,733) (113,579)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,380 16,757 152,018
Deferred tax liabilities:
Reserve for advanced depreciation deduction, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,356 13,297 151,722
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,828 6,103 71,559
Unrealized holding gain on securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,177 1,808 26,736
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 34 174
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,376 21,242 250,191
Net deferred tax assets (liabilities), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥(7,995) ¥(4,485) $ (98,173)
16. Real Estate for Lease
Effective from the year ended December 31, 2010, the Company has applied the “Accounting Standard for Disclosures about Fair Value of
Investment and Rental Property” (ASBJ Statement No. 20, November 28, 2008) and the “Guidance on Accounting Standard for Disclosures
about Fair Value of Investment and Rental Property” (ASBJ Guidance No. 23, November 28, 2008).
Fiscal 2010 (Jan. 1, 2010 to Dec. 31, 2010), the Company and certain consolidated subsidiaries own office buildings for rent and commercial
facilities for rent (including land) in Tokyo and other areas.
Rental income associated with real estate for rent in the fiscal year ended December 31, 2010, was ¥6,098 million ($74,877 thousand).
Significant earnings from rent are included under operating income; rental-related expenses are posted under operating expenses. The balance of real
estate for rent recorded in the consolidated balance sheets, as well as variance during the fiscal year under review and fair value, are as follows:
Millions of yen Thousands of U.S. dollars (Note 1)
Balance at
December
31, 2009
Change
during 2010
Balance at
December
31, 2010
Fair value at
December
31, 2010
Balance at
December
31, 2009
Change
during 2010
Balance at
December
31, 2010
Fair value at
December
31, 2010
¥165,537 ¥8,064 ¥173,601 ¥313,812 $2,032,624 $99,021 $2,131,645 $3,853,296
(Notes)
1. Amounts posted in the consolidated balance sheets represent the acquisition cost after the deduction of cumulative depreciation.
2. Of the differences noted during the fiscal year under review, the main increase was the acquisition of real estate of ¥13,268 million ($162,914 thousand); the main
decrease was depreciation of ¥5,107 million ($62,706 thousand).
3. Fair value at the end of the fiscal year under review is based primarily on real estate appraisals carried out by external appraisers.
SAPPORO HOLDINGS LIMITED
Annual Report 2010
53