D-Link 2004 Annual Report Download - page 56

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28
D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
(a) Non-trading purpose derivative financial instruments
(i) Foreign currency option contracts
As of December 31, 2003 and 2004, D-Link and subsidiaries had the following foreign
currency option contracts outstanding:
December 31, 2003
Contract Contract Amount (in thousands) Maturity
Call option (buy) USD34,000 Jan. ~ Mar. 2004
Call option (sell) USD22,000 Jan. 2004
Call option (buy) EUR23,250 Jan. ~ Sept. 2004
Put option (sell) USD18,250 Jan. ~ Sept. 2004
December 31, 2004
Contract Contract Amount (in thousands) Maturity
Put option (sell) USD 13,000 Jan. 2005
Put option (sell) EUR 4,000 Jan. ~ Feb. 2005
Put option (buy) USD 67,000 Jan. ~ Mar. 2005
Put option (buy) AUD 6,000 Jan. ~ Feb. 2005
Put option (buy) EUR 11,000 Jan. ~ Feb. 2005
Put option (buy) CAD 3,000 Mar. 2005
As of December 31, 2003 and 2004, the aforementioned options’ fair value was $(2,234)
thousand and $(13,481) thousand, respectively.
According to a ruling issued by the Accounting Research and Development Foundation,
foreign currency option contracts that do not qualify as hedges are marked-to-market,
with changes in value recognized in other unrealized expense. D-Link recognized this
loss of about $15,000 thousand under unrealized exchange loss.
The realized gain resulting from foreign currency option contracts was $821 thousand
and $6,019 thousand in 2003 and 2004, respectively.