Asus 2007 Annual Report Download - page 127

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123
ASUSTEK COMPUTER INC.
Notes to Non-Consolidated Financial Statements (Unaudited)
(In New Taiwan thousand dollars unless otherwise stated)
39
(2) Commodity price risk
The Company's exposure to price risk is minimal.
(3) Credit risk
The Company trades only with established and creditworthy third parties. It is the
Company's policy that all customers who wish to trade on credit terms are subject to
credit verification procedures. In addition, receivable balances are monitored on an
ongoing basis, which consequently minimizes the Company's exposure to bad debts.
With respect to credit risk arising from the other financial assets of the Company, which
comprise of cash and cash equivalents, available-for-sale financial assets and certain
derivative instruments, the Company's exposure to credit risk arising from the default of
counter-parties is limited to the carrying amount of these instruments.
Although the Company trades only with established third parties, it will request
collateral to be provided by third parties with less favorable financial positions.
(4) Liquidity risk
The Company's objective is to maintain a stable and flexible source of capital through
the use of financial instruments such as cash and cash equivalents, bank loans and bonds.
(5) Cash flow interest rate risk
There is no significant risk involved because the Company's short-term bank loans are
maturing within one year and the fluctuation of the floating rate is low.
2. FINANCIAL INSTRUMENTS
(1) Fair value of financial instruments:
March 31, 2008
Financial instruments Book value Fair value
Non-derivative financial instruments
Assets
Cash and cash equivalents $12,780,776 $12,780,776
Financial assets at fair value through profit or
loss-current
15,719,325 15,719,325
Receivables-net 70,454,523 70,454,523
Restricted time deposits-current 1,850,000 1,850,000
Available-for-sale financial assets-noncurrent 5,446,945 5,446,945
Financial assets evaluated by cost
method-noncurrent
130,678 (Note)
Refundable deposits 124,828 124,828