Income taxes (Tables)

12 Months Ended

Mar. 31, 2019

Income Tax [Abstract]

Components of income tax expense

	Millions of yen
	Year ended March 31
	2017		2018			2019
Current:
Domestic	¥	52,004	¥	35,018		¥	26,725
Foreign		5,697		8,589			8,720
Subtotal		57,701		43,607			35,445
Deferred:
Domestic		20,239		64,340			28,183
Foreign		2,289		(4,081	)		(6,618	)
Subtotal		22,528		60,259			21,565
Total	¥	80,229	¥	103,866		¥	57,010

Effective income tax rate reflected in consolidated statements of income

	Year ended March 31
	2017			2018			2019
Nomura’s effective statutory tax rate		31.0	%		31.0	%		31.0	%
Impact of:
Changes in deferred tax valuation allowances		(10.8	)		(22.8	)		(58.3	)
Additional taxable revenues		0.1			0.1			(2.9	)
Non-deductible expenses(1)		2.9			1.9			(110.3	)
Non-taxable revenue		(2.6	)		(3.6	)		16.8
Dividends from foreign subsidiaries		0.0			0.0			0.0
Tax effect of undistributed earnings of foreign subsidiaries		0.0			0.0			(2.8	)
Different tax rate applicable to income (loss) of foreign subsidiaries		0.3			0.8			(19.8	)
Effect of changes in foreign tax laws		—			23.5			0.5
Effect of changes in domestic tax laws		1.0			—			—
Tax benefit recognized on the devaluation of investment in subsidiaries and affiliates		1.7			1.7			5.4
Other		1.3			(0.9	)		(10.8	)
Effective tax rate		24.9	%		31.7	%		(151.2	)%

(1) Non-deductible expenses during the year ended March 31, 2019 included approximately ¥21 billion relating to goodwill impairment losses (which increased Nomura’s effective tax rate by 56.3%) and approximately ¥13 billion relating to litigation provisions and settlements (which increased Nomura’s effective tax rate by 34.0%).

Details of deferred tax assets and liabilities

	Millions of yen
	March 31
	2018			2019
Deferred tax assets
Depreciation, amortization and valuation of fixed assets	¥	19,982		¥	20,008
Investments in subsidiaries and affiliates		36,189			25,243
Valuation of financial instruments		61,249			71,806
Accrued pension and severance costs		20,967			29,711
Other accrued expenses and provisions		76,578			44,803
Operating losses		340,780			369,286
Other		5,587			9,213
Gross deferred tax assets		561,332			570,070
Less—Valuation allowances		(422,280	)		(444,916	)
Total deferred tax assets		139,052			125,154
Deferred tax liabilities
Investments in subsidiaries and affiliates		127,041			133,936
Valuation of financial instruments		43,985			41,770
Undistributed earnings of foreign subsidiaries		1,137			2,039
Valuation of fixed assets		4,524			10,109
Other		3,342			6,843
Total deferred tax liabilities		180,029			194,697
Net deferred tax assets (liabilities)	¥	(40,977	)	¥	(69,543	)

Changes in valuation allowance for deferred tax assets

	Millions of yen
	Year ended March 31
	2017			2018			2019
Balance at beginning of year	¥	543,489		¥	519,492		¥	422,280
Net change during the year		(23,997	)(1)		(97,212	)(2)		22,636	(3)
Balance at end of year	¥	519,492		¥	422,280		¥	444,916

(1) Primarily includes an increase of ¥2,040 million of valuation allowances of certain foreign subsidiaries partly because of changes in the expected realization of deferred tax assets, a reduction of ¥35,214 million of valuation allowances of certain foreign subsidiaries mainly by utilization of operating loss carryforwards, an increase of ¥5,811 million of valuation allowances related to Japanese subsidiaries and the Company as a result of changes in the expected realization of deferred tax assets, and an increase of ¥3,366 million related to Japanese subsidiaries and the Company because of increase in valuation allowances related to operating loss carryforwards due to the effect of changes in domestic tax laws. In total, ¥23,997 million of allowances decreased for the year ended March 31, 2017.

(2) Primarily includes a reduction of ¥80,459 million of valuation allowances of certain foreign subsidiaries mainly due to changes in tax laws in the U.S., an increase of ¥17,340 million related to Japanese subsidiaries and the Company because of an increase in valuation allowances related to operating loss carryforwards, and a reduction of ¥34,093 million of valuation allowances related to Japanese subsidiaries and the Company as a result of changes in the expected realization of deferred tax assets. In total, ¥97,212 million of allowances decreased for the year ended March 31, 2018.

(3) Primarily includes an increase of ¥11,843 million of valuation allowances of certain foreign subsidiaries mainly due to an increase in valuation allowances related to operating loss carryforwards, partially offset by a decrease of valuation allowances related to accrued expenses and provisions, an increase of ¥6,265 million related to Japanese subsidiaries and the Company because of an increase in valuation allowances related to operating loss carryforwards recognized in the current year, an increase of ¥14,976 million of valuation allowances related to Japanese subsidiaries and the Company as a result of changes in the expected realization of deferred tax assets, and a reduction of ¥10,448 million of valuation allowances related to expiration of operating loss carryforwards. In total, ¥22,636 million of allowances increased for the year ended March 31, 2019.

Summarizes major jurisdictions subject to examination

Jurisdiction	Year
Japan		2014	(1)
United Kingdom		2016
United States		2016

(1) The earliest year in which Nomura remains subject to examination for transfer pricing issues is 2013.