Asus 2010 Annual Report Download - page 126
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122
38
resulting from the forward contracts and currency option contracts. Thus, the
market risk of foreign currency exchange rate changes does not have material
impact on the Company.
(B) The open-end funds and stocks of listed companies held by the Company are
classified as financial assets measured at fair value through profit or loss and
available-for-sale financial assets. As these assets are measured at fair value,
the Company has risk exposure related to changes in fair value in an equity
securities market.
(C) Information of significant foreign assets and liabilities :
2010/12/31 2009/12/31
Foreign Currency
Foreign Currency
(in dollars) Rate NTD (in dollars) Rate NTD
Financial a
ssets
Monetary item
USD
$
1,790,476,186 29.13
$ 52,156,571
$
1,569,530,796 31.99
$ 50,209,290
Long
-term investment
accounted for under
the equity method
USD 401,932,589 29.13 11,708,296 276,277,271 31.99 8,838,110
Financial l
iabilities
Monetary item
USD 1,566,947,170 29.13 45,645,171 1,294,999,513 31.99 41,427,034
B. Credit risk
(A) Credit risk means the potential loss of the Company if the counterparty
involved in that transaction defaults. Since the Company’s derivative financial
instrument agreements are entered into with international financial institutions
with good credit ratings, management believes that there is no significant
credit risk from these transactions.
(B) The primary potential credit risk is from financial instruments like cash, bank
deposits, equity securities under non-equity method, and accounts receivable.
The Company deposits cash in different financial institutions. Equity securities
under non-equity method were funds and listed stocks issued by companies
with good credit ratings. The Company manages credit risk exposure related
to each financial institution and believes that there is no significant
concentration of credit risk of cash and equity securities. The customers of the
Company have good credit and profit records. The Company evaluates the
financial condition of these customers in order to reduce credit risk of
accounts receivable.
C. Liquidity risk
(A) The Company adjusts its funding mainly through corporate bonds, cash and
bank deposits. The Company maintains funding sufficient to fulfill all
contract obligations, and thereby expects no significant liquidity risk would