Lenovo Group (0992) said yesterday it expected to make a one-off charge of US$400 million (HK$3.12 billion) in respect of its deferred tax assets to be included in the result for the nine months ended December 31, 2017.
The adjustment came after the impact of the re-measurement of the US deferred tax assets as a result of the recently enacted US tax reform legislation, the Tax Cuts and Jobs Act.
The change to be reflected in the financial results is of a non-cash nature, and the company does not expect it to have any material effect on its operation or cash-flow position, the PC maker said in a filing to the Hong Kong bourse.
Lenovo, a unit of Legend Holdings (3396), said US corporate tax cuts would "positively impact" future earnings of its US operations in the long-term.
"The company wishes to note that the Act also reduces the statutory rate of the US corporate income tax," the PC maker added.
Meanwhile, it is expected that the profit attributable to the equity owners of Lenovo for the year ended December 31, 2017 will be reduced by 760 million yuan (HK$914.19 million), according to a separate exchange filing from Legend Holdings.
Legend Holdings said the performance of other business segments "remain stable" and the overall financial position is also "good and healthy."
Details of the company's financial information will be disclosed in the third quarter results announcement to be published on February 1, according to the filing.
Tax reforms signed into law in December lower the income tax rate for US companies to 21 percent from 35 percent.