Crucial 2012 Annual Report Download - page 276

31
INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
As of December 31, 2010 and 2011, the fair value of Company's financial assets and liabilities were as follows:
December 31,
2010 2011
Fair value Fair value
Book
value
Market value
in active
market
Value
determined
by using broker
quote/carrying
value Book value
Market value
in active
market
Value
determined
by using broker
quote/carrying
value
Non-derivative financial
instruments:
Financial assets:
Cash and cash equivalents $ 5,018,667 5,018,667 — 5,463,640 5,463,640 —
Accounts receivable - related
parties 5,729,041 — 5,729,041 7,459,495 — 7,459,495
Financial liabilities:
Short-term loans — — — 1,874,600 — 1,874,600
Notes and accounts payable
(including accounts payable -
related parties) 10,906,943 — 10,906,943 3,264,514 — 3,264,514
Bonds payable (including current
portion of bonds payable) 16,030,861 — 16,060,989 13,998,754 — 14,019,608
Long-tern loans (including
current portion of long-term
loans) 52,378,153 — 52,378,153 43,115,166 — 43,115,166
Long-term other account payable
- related parities (including
other payables - related parties) 1,923,491 — 1,923,491 — — —
Other payables - related parties
(lending from related parties) 3,000,000 — 3,000,000 22,028,570 — 22,028,570
Derivative financial instruments:
Financial liabilities:
Interest rate swaps 223,302 — 223,302 27,054 — 27,054
The methods and assumptions used to estimate the fair value of each class of financial instruments were as
follows:
(i) The fair value of financial instruments traded in active markets is based on quoted market prices. If the
financial instruments are not traded in an active market, then the fair value is determined by certain valuation
techniques, using assumptions under existing market conditions.
(ii) The discounted present value of anticipated cash flows is adopted as the fair value of long-term debt. The
discounting rates used in calculating the present value are similar to those of the Company's existing long-
term loans (including current portion of long-term loans) and long-term other account payable - related
parties, whose interest rates fluctuates depending on the current market rates.