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v3.23.2

Income Taxes (Tables) | 12 Months Ended
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Mar. 31, 2023
Income Tax Disclosure [Abstract] |
Income before Income Taxes and Provision for Income Taxes | Income before income taxes and the provision for income taxes in fiscal 2021, 2022 and 2023 are as follows:
|  | Millions of yen |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Income before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Japan |  | ¥ | 171,569 |  |  | ¥ | 311,351 |  |  | ¥ | 176,158 |
Overseas |  |  | 115,992 |  |  |  | 193,525 |  |  |  | 191,010 |
|  | ¥ | 287,561 |  |  | ¥ | 504,876 |  |  | ¥ | 367,168 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current— |  |  |  |  |  |  |  |  |  |  |  |
Japan |  | ¥ | 45,262 |  |  | ¥ | 136,623 |  |  | ¥ | 30,808 |
Overseas |  |  | 19,967 |  |  |  | 38,433 |  |  |  | 27,490 |
|  |  | 65,229 |  |  |  | 175,056 |  |  |  | 58,298 |
Deferred— |  |  |  |  |  |  |  |  |  |  |  |
Japan |  |  | 10,642 |  |  |  | (631 | ) |  |  | 14,302 |
Overseas |  |  | 14,876 |  |  |  | 12,839 |  |  |  | 14,900 |
|  |  | 25,518 |  |  |  | 12,208 |  |  |  | 29,202 |
Provision for income taxes |  | ¥ | 90,747 |  |  | ¥ | 187,264 |  |  | ¥ | 87,500 |
Reconciliations of Differences between Tax Provision Computed and Consolidated Provisions for Income Taxes | Reconciliations of the differences between the tax provision computed at the statutory rate and the consolidated provision for income taxes in fiscal 2021, 2022 and 2023 are as follows:
|  | Millions of yen |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Income before income taxes |  | ¥ | 287,561 |  |  | ¥ | 504,876 |  |  | ¥ | 367,168 |
Tax provision computed at the statutory rate |  | ¥ | 90,582 |  |  | ¥ | 159,036 |  |  | ¥ | 115,658 |
Increases (reductions) in taxes due to: |  |  |  |  |  |  |  |  |  |  |  |
Change in valuation allowance |  |  | 6,808 |  |  |  | 11,464 |  |  |  | 2,533 |
Nondeductible expenses |  |  | 2,751 |  |  |  | 4,066 |  |  |  | 4,794 |
Nontaxable income |  |  | (1,629 | ) |  |  | (2,611 | ) |  |  | (3,347 | )
Effect of lower tax rates on certain subsidiaries |  |  | (12,895 | ) |  |  | (16,584 | ) |  |  | (19,631 | )
Effect of investor taxes on earnings of subsidiaries |  |  | 4,590 |  |  |  | 8,155 |  |  |  | 4,789 |
Effect of the tax law and rate changes |  |  | 1,158 |  |  |  | (142 | ) |  |  | 180 |
Effect of sale or liquidation of subsidiaries |  |  | 878 |  |  |  | 25,642 |  |  |  | (16,754 | )
Other, net |  |  | (1,496 | ) |  |  | (1,762 | ) |  |  | (722 | )
Provision for income taxes |  | ¥ | 90,747 |  |  | ¥ | 187,264 |  |  | ¥ | 87,500 |
Total Income Tax Expense Recognized | Total income tax expense recognized in fiscal 2021, 2022 and 2023 was allocated as follows:
|  | Millions of yen |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Provision for income taxes |  | ¥ | 90,747 |  |  | ¥ | 187,264 |  |  | ¥ | 87,500 |
Income tax expense (benefit) allocated to other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |
Net change of unrealized gains (losses) on investment in securities |  |  | (6,212 | ) |  |  | (21,897 | ) |  |  | (41,961 | )
Net change of debt valuation adjustments |  |  | (349 | ) |  |  | (131 | ) |  |  | 20 |
Net change of defined benefit pension plans |  |  | 2,615 |  |  |  | 4,889 |  |  |  | 1,630 |
Net change of foreign currency translation adjustments |  |  | (13,958 | ) |  |  | (17,347 | ) |  |  | (17,325 | )
Net change of unrealized gains (losses) on derivative instruments |  |  | 1,883 |  |  |  | 4,734 |  |  |  | 3,514 |
Adjustments to retained earnings for changes in accounting principles* |  |  | (17,113 | ) |  |  | (215 | ) |  |  | 0 |
Other direct adjustments to shareholders’ equity |  |  | 1,521 |  |  |  | 214 |  |  |  | 36 |
Total income tax expense |  | ¥ | 59,134 |  |  | ¥ | 157,511 |  |  | ¥ | 33,414 |
* | The amount for fiscal 2021 reflects the tax effect of the adoption of Accounting Standards Update 2016-13 (“Measurement of Credit Losses on Financial Instruments”—ASC 326 (“Financial Instruments—Credit Losses”)). The amount for fiscal 2022 reflects the tax effect of the adoption of Accounting Standards Update 2019-12 (“Simplifying the Accounting for Income Taxes”—ASC 740 (“Income Taxes”)).
Deferred Tax Assets and Liabilities | The tax effects of temporary differences and carryforwards giving rise to the deferred tax assets and liabilities as of March 31, 2022 and 2023 are as follows:
|  | Millions of yen |
|  | 2022 |  |  | 2023 |
Assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | ¥ | 32,914 |  |  | ¥ | 59,516 |
Allowance for credit losses |  |  | 23,381 |  |  |  | 16,382 |
Investment in securities |  |  | 6,685 |  |  |  | 12,745 |
Accrued expenses |  |  | 23,900 |  |  |  | 25,735 |
Investment in operating leases |  |  | 15,099 |  |  |  | 14,999 |
Property under facility operations |  |  | 27,358 |  |  |  | 24,615 |
Installment loans |  |  | 4,361 |  |  |  | 5,445 |
Unrealized losses on investment in securities |  |  | 29,372 |  |  |  | 71,277 |
Lease liabilities |  |  | 77,367 |  |  |  | 79,636 |
Other |  |  | 91,837 |  |  |  | 103,210 |
|  |  | 332,274 |  |  |  | 413,560 |
Less: valuation allowance |  |  | (35,155 | ) |  |  | (37,287 | )
|  |  | 297,119 |  |  |  | 376,273 |
Liabilities: |  |  |  |  |  |  |  |
Net investment in Leases |  |  | 13,501 |  |  |  | 10,599 |
Investment in operating leases |  |  | 121,337 |  |  |  | 137,618 |
Unrealized gains on investment in securities |  |  | 2,505 |  |  |  | 4,779 |
Deferred insurance policy acquisition costs |  |  | 73,077 |  |  |  | 74,211 |
Policy liabilities and policy account balances |  |  | 74,939 |  |  |  | 87,150 |
Property under facility operations |  |  | 21,931 |  |  |  | 22,022 |
Other intangible assets |  |  | 108,257 |  |  |  | 141,864 |
Undistributed earnings |  |  | 59,134 |  |  |  | 76,281 |
Prepaid benefit cost |  |  | 14,483 |  |  |  | 17,290 |
Advances paid |  |  | 8,647 |  |  |  | 8,346 |
Right-of-use assets |  |  | 77,003 |  |  |  | 78,631 |
Other |  |  | 22,081 |  |  |  | 28,772 |
|  |  | 596,895 |  |  |  | 687,563 |
Net deferred tax liability |  | ¥ | 299,776 |  |  | ¥ | 311,290 |
Net deferred tax assets and liabilities at March 31, 2022 and 2023 are reflected in the accompanying consolidated balance sheets under the following captions:
|  | Millions of yen |
|  | 2022 |  |  | 2023 |
Other assets |  | ¥ | 46,065 |  |  | ¥ | 48,292 |
Income taxes: Deferred |  |  | 345,841 |  |  |  | 359,582 |
Net deferred tax liability |  | ¥ | 299,776 |  |  | ¥ | 311,290 |
Net Operating Loss Carryforwards Expire Date | The Company and certain subsidiaries have net operating loss carryforwards of ¥456,985 million at March 31, 2023, which expire as follows:
Years ending March 31, |  | Millions of yen |
2024 |  | ¥ | 17,360 |
202 5 |  |  | 21,183 |
202 6 |  |  | 24,810 |
202 7 |  |  | 13,686 |
202 8 |  |  | 7,993 |
Thereafter |  |  | 279,892 |
Indefinite period |  |  | 92,061 |
Total |  | ¥ | 456,985 |

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