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Lenovo to make $400 million one-off charge on US tax reforms

The adjustment to be reflected in the financial results is of a non-cash nature

Reuters January 21, 2018 Less than a minute read

a man uses his laptop next to lenovo 039 s logos during the mobile world congress in barcelona spain february 25 2016 photo reuters

A man uses his laptop next to Lenovo's logos during the Mobile World Congress in Barcelona, Spain February 25, 2016. PHOTO: REUTERS

Lenovo 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 US 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.

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Lenovo, a unit of Legend Holdings, said US corporate tax cuts would “positively impact” future earnings of its US operations in the long-term.

Lenovo will announce third-quarter results on February 1.

Tax reforms signed into law in December lower the income tax rate for US companies to 21 per cent from 35 per cent.