Crucial 2012 Annual Report Download - page 247

2
INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
(c) Basis for classifying assets and liabilities as current or non-current
Cash and assets that are held primarily for the purpose of being traded or are expected to be realized within
12 months after the balance sheet date are classified as current assets; all other assets are classified as non-
current assets.
Liabilities that are held primarily for the purpose of being traded or are expected to be settled within 12 months
after the balance sheet date are classified as current liabilities; all other liabilities are classified as non-current
liabilities.
(d) Impairment of non-financial assets
The Company assesses at each balance sheet date whether there is any indication that an asset (individual asset
or cash-generating unit) may have been impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. The Company recognizes impairment loss for an asset whose carrying value
is higher than the recoverable amount.
The Company reverses an impairment loss recognized in prior periods for assets if there is any indication that
the impairment loss recognized no longer exists or has decreased. The carrying value after the reversal should
not exceed the recoverable amount or the depreciated or amortized balance of the assets assuming no impairment
loss was recognized in prior periods.
(e) Cash equivalents
Commercial paper and corporate bonds with agreements to repurchase with maturities of less than three months
from the date of purchase are classified as cash equivalents, which are highly liquid investment with no
significant level of market or credit risk from potential interest rate changes.
(f) Financial instruments
The Company has adopted the following policies for financial instruments.
1. Financial assets/liabilities reported at fair value through profit or loss
Derivatives that do not meet the criteria for hedge accounting are initially recognized at fair value, with
transaction costs expensed as incurred. The derivatives are remeasured at fair value subsequently with
changes in fair value recognized in earnings. A regular way purchase or sale of financial assets is accounted
for using settlement date accounting.
Fair value is estimated using valuation techniques which incorporate estimates and assumptions that are
consistent with prevailing market conditions. When the net effect of the fair valuation of derivatives is
positive, the derivative is recognized as a financial asset; but when the net effect is negative, the derivative
is recognized as a financial liability.