HONG KONG (Reuters) – Lenovo Group Ltd said on Wednesday it expected to make a one-off charge of $400 million for nine months ended in December due to a reassessment of U.S. deferred tax assets.
The adjustment 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, said U.S. corporate tax cuts would “positively impact” future earnings of its U.S. operations in the long-term.
Lenovo will announce third-quarter results on Feb. 1.
Tax reforms signed into law in December lower the income tax rate for U.S. companies to 21 percent from 35 percent.
Reporting by Donny Kwok; Editing by Stephen Coates