v3.26.1
Income taxes (Tables)
 12 Months Ended
Mar. 31, 2026
Text Block1 [Abstract]  
Income (loss) before income taxes and the provision for current and deferred income taxes attributable to such income
Income (loss) before income taxes and the provision for current and deferred income taxes attributable to such income are as follows. In connection with the Resolution for the plan regarding the execution of the Partial Spin-off of the Financial Services business, the Financial Services business was classified as a discontinued operation. Therefore, the income (loss) before income taxes and income tax expenses of the Financial Services business are included in net income(loss) from discontinued operations. Accordingly, comparative periods have been re-presented to reflect this change.
 
                         
 
 
Yen in millions
 
 
 
Fiscal year ended March 31
 
 
 
2024
 
 
2025
 
 
2026
 
Income (loss) before income taxes:
     1,095,086       1,343,198       1,422,374  
 
 
 
    
 
 
    
 
 
  
Income tax expenses
      
Current
     255,375       275,376       326,555  
Deferred
     (16,270 )
 
     (17,896 )
 
     40,553  
 
 
 
    
 
 
    
 
 
  
Total income tax expense
       239,105         257,480       367,108  
 
 
 
    
 
 
    
 
 
  
A reconciliation of the differences between the Japanese statutory tax rate and the effective tax rate
A reconciliation of the differences between the Japanese statutory tax rate and the effective tax rate for continuing operations is as follows:
 
   
Fiscal year ended March 31
  
   
2024
    
2025
    
2026
  
Statutory tax rate
       31.5 %        31.5 %      31.5 % 
Non-deductible
expenses
     0.3       0.4       0.6  
Income tax credits
     (3.8 )      (1.5 )      (2.2 )
Change in statutory tax rate
     0.1       0.0       0.0  
Change in unrecognized deferred tax assets
     (2.5 )      (5.7 )      0.2  
Change in deferred tax liabilities on undistributed earnings of foreign subsidiaries and affiliates
     1.0       0.4       0.6  
Foreign income tax differential
     (5.6 )      (6.5 )      (4.6 )
Recording or reversal of liabilities for uncertain tax positions
     0.2       0.1       (0.5 )
Controlled Foreign Company taxation in Japan
     0.1       0.1       0.1  
Other
     0.5       0.4       0.1  
 
 
 
    
 
 
    
 
 
  
Effective income tax rate
     21.8 %      19.2 %      25.8 % 
 
 
 
    
 
 
    
 
 
  
Schedules of deferred tax assets and liabilities by major cause of their occurrence
The schedules of deferred tax assets and liabilities by major cause of their occurrence are as follows:
 
   
Yen in millions
  
   
Fiscal year ended March 31, 2025
  
   
Beginning
balance
    
Recognized
in profit or
loss
    
Recognized in
other
comprehensive
income
    
Changes
accompanying
business
combination
    
Recognized
directly in
equity
    
Other
*1
    
Ending
balance
  
Deferred tax assets:
              
Operating loss carryforwards for tax purposes
     77,541       2,270       (2 )      567       -       1,015       81,391  
Defined benefit liabilities
     75,547       (475 )      (4,550 )      -       -       (7,549 )      62,973  
Amortization including content assets
     19,619       8,903       -       -       -       (450 )      28,072  
Lease liabilities
     135,730       10,457       -       -       -       (10,913 )      135,274  
Warranty reserves and accrued expenses
     167,402       11,737       -       3       -       (4,370 )      174,772  
Inventories
     48,807       (3,504 )      -       -       -       1,174       46,477  
Depreciation
     41,603       (477 )      -       -       -       (2,232 )      38,894  
Equity securities measured at FVPL
     19,240       (9,781 )      4,076       -       -       (669 )      12,866  
Debt securities measured at FVOCI
     382,527       4,309       289,625       -       -       (100,198 )      576,263  
Tax credit carryforwards
     57,646       4,219       -       57       -       (325 )      61,597  
Loss allowances
     10,741       152       -       -       -       1,110       12,003  
Impairment of investments
     7,780       51,863       -       -       -       (5,435 )      54,208  
Deferred revenue
     48,454       24,147       -       -       -       (1 )      72,600  
Research and development expenditures
*2
 
 
 75,323
 
 
 
 26,992
 
 
 
 -
 
 
 
 -
 
 
 
 -
 
 
 
 (1,371
)
 
 
 
 100,944
 
Other
*2
     236,976       38,527       656       523       3,125       115,467       395,274  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total deferred tax assets
     1,404,936       169,339       289,805         1,150       3,125       (14,747 )     1,853,608  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Deferred tax liabilities:
              
Insurance contract liabilities
     (499,709 )      (67,854 )      (219,798 )      -       -       67,524       (719,837 ) 
Right-of-use
assets
     (113,240 )      (8,529 )      -       -       -       1,239       (120,530 ) 
Equity securities measured at FVPL
     (52,334 )      (48,477 )      -       -       -       660       (100,151 ) 
Intangible assets acquired through stock exchange offerings
     (23,949 )      -       -       -       -       -       (23,949 ) 
Intangible assets acquired through business combinations
*3
     (193,054 )     15,287     -       (6,842
)
 		     -       2,322       (182,287 )
Undistributed earnings of foreign subsidiaries and affiliates
     (84,951 )      (16,303 )      19       -       -       2,009       (99,226 ) 
Investment in M3, Inc.
     (52,625 )      (4,346 )      -       -       -       -       (56,971 ) 
Other
*3
     (51,948 )     (60,669 )     376       2,140       7       (56,507 )     (166,601 )
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total deferred tax liabilities
     (1,071,810 )     (190,891 )     (219,403 )     (4,702 )     7       17,247       (1,469,552 )
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
*1
“Other” includes exchange differences on translating foreign operations and others.
*2
“Research and development expenditures,” which were included within “Other” in the fiscal year ended March 31, 2025, have increased in materiality and have been reclassified and presented separately, starting from the fiscal year ended March 31, 2026. As a result of this change, “Research and development expenditures,” which were included within “Other” in the fiscal year ended March 31, 2025, have been reclassified.
*3
“Intangible assets acquired through business combinations,” which were included within “Other” in the fiscal year ended March 31, 2025, have increased in materiality and have been reclassified and presented separately, starting from the fiscal year ended March 31, 2026. As a result of this change, certain reclassifications have been made, the primary ones being as follows: “Intangible assets acquired through business combinations,” which were included within “Other” in the fiscal year ended March 31, 2025, have been reclassified; and “Intangible assets derived from EMI Music Publishing acquisition,” which were presented in the fiscal year ended March 31, 2025, have been reclassified and presented as “Intangible assets acquired through business combinations,” considering the nature of the adjustments.
 
 
 
 
Yen in millions
 
 
 
Fiscal year ended March 31, 2026
 
 
 
Beginning
balance
 
 
Recognized
in profit or
loss
 
 
Recognized in
other
comprehensive
income
 
 
Changes
accompanying
business
combination
 
 
Recognized
directly in
equity
 
 
Other
*1
 
 
Impact
from loss of
control of
the
Financial
Services
business
*2
 
 
Ending
balance
 
Deferred tax assets:
 
 
 
 
 
 
 
 
Operating loss carryforwards for tax purposes
 
 
81,391
 
 
 
(11,007
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
3,410
 
 
 
 (47
)
 
 
73,747
 
Defined benefit liabilities
 
 
62,973
 
 
 
11,676
 
 
 
(13,014
)
 
 
-
 
 
 
-
 
 
 
492
 
 
 
 (11,032
)
 
 
51,095
 
Amortization including content assets
 
 
28,072
 
 
 
8,168
 
 
 
-
 
 
 
10
 
 
 
7,389
 
 
 
(8,358
)
 
 
 
-
 
 
 
35,281
 
Lease liabilities
 
 
135,274
 
 
 
26,059
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
5,428
 
 
 
 (16,510
)
 
 
150,251
 
Warranty reserves and accrued expenses
 
 
174,772
 
 
 
25,869
 
 
 
-
 
 
 
299
 
 
 
-
 
 
 
8,530
 
 
 
 
(9,850
)
 
 
199,620
 
Inventories
 
 
46,477
 
 
 
(2,914
)
 
 
-
 
 
 
12
 
 
 
-
 
 
 
1,183
 
 
 
 
-
 
 
 
44,758
 
Depreciation
 
 
38,894
 
 
 
21,218
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
1,046
 
 
 
 
(1,961
)
 
 
59,197
 
Equity securities measured at FVPL
 
 
12,866
 
 
 
-
 
 
 
6,514
 
 
 
-
 
 
 
-
 
 
 
8,650
 
 
 
 
(2,028
)
 
 
26,002
 
Debt securities measured at FVOCI
 
 
576,263
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
(576,263
)
 
 
-
 
Tax credit carryforwards
 
 
61,597
 
 
 
(19,815
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
2,452
 
 
 
 
-
 
 
 
44,234
 
Loss allowances
 
 
12,003
 
 
 
401
 
 
 
-
 
 
 
124
 
 
 
-
 
 
 
915
 
 
 
 
(426
)
 
 
13,017
 
Impairment of investments
 
 
54,208
 
 
 
(37,490
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
(6,166
)
 
 
 
(546
)
 
 
10,006
 
Deferred revenue
 
 
72,600
 
 
 
(12,705
)
 
 
-
 
 
 
(25
)
 
 
-
 
 
 
4,631
 
 
 
 
-
 
 
 
64,501
 
Research and development expenditures
 
 
 100,944
 
 
 
 6,257
 
 
 
 -
 
 
 
 -
 
 
 
 -
 
 
 
 6,514
 
 
 
 -
 
 
 
 113,715
 
Other
 
 
395,274
 
 
 
(28,048
)
 
 
331
 
 
 
950
 
 
 
712
 
 
 
(5,915
)
 
 
 
(118,100
)
 
 
245,204
 
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total deferred tax assets
 
 
1,853,608
 
 
 
(12,331
)
 
 
(6,169
)
 
 
1,370
 
 
 
8,101
 
 
 
22,812
 
 
 
 (736,763
)
 
 
1,130,628
 
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
Insurance contract liabilities
 
 
(719,837
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 719,837
 
 
 
-
 
Right-of-use
assets
 
 
(120,530
)
 
 
(18,944
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
(4,016
)
 
 
 16,839
 
 
 
(126,651
)
Equity securities measured at FVPL
 
 
(100,151
)
 
 
10,141
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
(6,446
)
 
 
 
-
 
 
 
(96,456
)
 
Intangible assets acquired through stock exchange
offerings
 
 
(23,949
)
 
 
(608
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
-
 
 
 
(24,557
)
Intangible assets acquired through business
combinations
 
 
(182,287
)
 
 
30,412
 
 
 
-
 
 
 
(14,936
)
 
 
-
 
 
 
(13,367
)
 
 
 
-
 
 
 
(180,178
)
Undistributed earnings of foreign subsidiaries and
affiliates
 
 
(99,226
)
 
 
(7,161
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
(7,878
)
 
 
 
-
 
 
 
(114,265
)
Investment in M3, Inc.
 
 
(56,971
)
 
 
(5,328
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 -
 
 
 
(62,299
)
Other
 
 
(166,601
)
 
 
(36,734
)
 
 
1,684
 
 
 
(1,577
)
 
 
-
 
 
 
21,302
 
 
 
 5,113
 
 
 
(176,813
)
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total deferred tax liabilities
 
 
(1,469,552
)
 
 
(28,222
)
 
 
1,684
 
 
 
(16,513
)
 
 
-
 
 
 
(10,405
)
 
 
 741,789
 
 
 
(781,219
)
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
*1
“Other” includes exchange differences on translating foreign operations and others.
*2
This includes the impact of the deconsolidation of the SFGI, which operates Financial Services business, resulting from the execution of the Partial
Spin-off
of the Financial Services business.
Disclosure of detailed information about temporary difference unused tax losses and unused tax credits [Text Block]
As of March 31, 2025 and 2026, the deductible temporary differences, operating loss carryforwards and tax credit carryforwards for which no deferred tax asset is recognized are as follows:
 
 
  
Yen in millions
 
 
  
 Fiscal year ended March 31 
 
 
  
2025
 
  
2026
 
Deductible temporary differences
      131,442        247,701  
Operating loss carryforwards
      1,465,002        1,484,949  
Tax credit carryforwards
      12,139        13,247  
Disclosure of detailed information about expiration period of operating loss carryforward
As of March 31, 2025 and 2026, the expected expiration period of the operating loss carryforwards for which no deferred tax asset is recognized are as follows:
 
 
  
Yen in millions
 
 
  
 Fiscal year ended March 31 
 
 
  
2025
 
  
2026
 
Within 5 years
      362,529        449,326  
Over 5 years to 10 years
      459,335        347,087  
Over 10 years to 15 years
      31,198        37,971  
Over 15 years
      16,575        28,794  
No expiration period
      595,365        621,771  
  
 
 
     
 
 
  
Total
      1,465,002        1,484,949