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Income Taxes (Tables)

12 Months Ended

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
2025			21,183
2026			24,810
2027			13,686
2028			7,993
Thereafter			279,892
Indefinite period			92,061
Total		¥	456,985

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Schedule of Income Tax Expense Benefit Intraperiod Tax Allocation

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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