Asus 2008 Annual Report Download - page 202

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ASUSTEK COMPUTER INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In thousands of New Taiwan dollars unless otherwise stated)
(2) Commodity price risk
The Company’s and subsidiaries' exposure to price risk is minimal.
(3) Credit risk
The Company and subsidiaries trade only with established and creditworthy third parties.
It is the Company’s and subsidiaries' 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 and subsidiaries' exposure to bad debts.
With respect to credit risk arising from the other financial assets of the Company and
subsidiaries, which comprise of cash and cash equivalents, available-for-sale financial
assets and certain derivative instruments, the maximum exposure to credit risk arising
from the default of counter-parties is limited to the carrying amount of these
instruments.
Although the Company and subsidiaries trade only with established third parties, it will
nevertheless request collateral to be provided by third parties with less favorable
financial positions.
(4) Liquidity risk
The Company’s and subsidiaries' objective is to maintain a balance of funding continuity
and flexibility through the use of financial instruments such as cash and cash equivalents,
bank loans and bonds.
(5) Cash flow risk from fluctuations in interest rate
There is no significant risk involved because the Company’s and subsidiaries' short-term
bank loans are maturing within one year and the fluctuation of the floating rate is low.