In May 2010, the Legislative Yuan passed the amendment of Article 5 of the Income Tax Law, which reduced the income  tax rate of profit-seeking enterprises to 17%, effective from January 1, 2010. The Company recalculated its deferred  income tax assets and liabilities in accordance with the amended Article and recorded the resulting difference as an income  tax expense or benefit. Under Article 10 of the Statute for Industrial Innovation (SII) passed by the Legislative Yuan in April 2010, a profit-seeking  enterprise may deduct up to 15% of its research and development expenditures from its income tax payable for the fiscal  year in which these expenditures are incurred, but this deduction should not exceed 30% of the income tax payable for that  fiscal year. This incentive took effect from January 1, 2010 and is effective until December 31, 2019. The decrease of valuation allowance as of December 31, 2011 was attributed to the change of provision for doubtful  accounts. PART III c.  Income tax expense consisted of following: d. Deferred income taxes arise due to temporary differences in the book and tax bases of certain assets and liabilities.  Significant components of deferred income tax assets are shown in the following table: F-42 2009 2010 2011 NT$ NT$ NT$ (In Millions) Income tax payable $  11,777 $  9,100 $  8,467 Income tax - separated 63 4 ─ Income tax ─ deferred 1,099 27 57 Adjustments of prior years’ income tax (196) (2) 52 Foreign income tax ─ ─ 28 $  12,743 $  9,129 $  8,604 Year Ended December 31 December 31 2010 2011 NT$ NT$ (In Millions) Current Deferred income tax assets (liabilities): Provision for doubtful accounts  $  241 $178 Valuation loss on inventory  17 62 Loss carryforward ─ 27 Unrealized accrued expense 51 26 Estimated warranty liabilities  23 8 Investment tax credit 2 2 Valuation gain on financial instruments, net (6) ─ Unrealized foreign exchange loss (gain), net 1 (13) Others 3 2 332 292 Valuation allowance  (241) (177) Net deferred income tax assets - current  $  91 $  115