Asus 2011 Annual Report Download - page 132
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128
C. The fair value of convertible bonds payable is not available, and a valuation technique is used.
The assumptions used in the said valuation are the same as those used by financial market
traders when quoting their prices. However, the fair value is not expected to equal future cash
outflow.
D. The fair values of derivative financial instruments which include unrealized gain or loss on
unsettled contracts were determined based on the amounts to be received or paid assuming that
the contracts were settled as of the reporting date.
E. Financial assets carried at cost and held to maturity are invested in unquoted equity
instruments and mutual fund bond obligations whose fair value cannot be estimated.
(3) Procedure of financial risk control
The management can effectively control significant market risks after appropriately taking into
consideration the economic environment, competition, and changes of market value risk by
setting the goal of risk management.
(4) Information of material financial risk
A. Market risk
(A) The main currency for purchases and sales of the Company is the US dollar. The
Company uses the principle of natural hedge to mitigate the risk and utilizes spot or
forward exchange contracts and currency option contracts to hedge foreign currency risk.
The forward exchange and currency option contracts’ duration corresponds to the
Company’s foreign currency assets’ and liabilities’ due date and future cash flows. The
exchange gain and loss resulting from foreign currency assets and liabilities will be offset
by the exchange gain and loss resulting from the hedged item.
(B) The open-end funds and listed and OTC stocks held by the Company are classified as
financial assets 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 currency denominated assets and liabilities:
Foreign Currency Foreign Currency
(in dollars) Rate NTD (in dollars) Rate NTD
Financial assets
Monetary item
USD 2,069,185,553$ 30.275 62,644,593$ 1,790,476,186$ 29.13 52,156,571$
Long-term equity investments
accounted for under
the equity method
USD 663,488,476 30.275 20,087,114 401,932,589 29.13 11,708,296
Financial liabilities
Monetary item
USD 1,692,874,003 30.275 51,251,760 1,566,947,170 29.13 45,645,171
2011/12/31
2010/12/31