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107
(a) The carrying amounts of finance subsidiaries-receivables
at March 31, 2006 and 2007 in the table exclude
¥1,996,686 million and ¥1,709,978 million ($14,486 mil-
lion) of direct financing leases, net, classified as finance
subsidiaries-receivables in the consolidated balance
sheets, respectively. The carrying amounts of finance sub-
sidiaries-receivables at March 31, 2006 and 2007 in the
table also include ¥627,168 million and ¥678,649 million
($5,749 million) of finance receivables classified as trade
receivables and other assets in the consolidated balance
sheets.
(b) A subsidiary had a forward sale contract in relation to a
portion of the above convertible notes. The carrying
amount and estimated fair value of the derivative financial
instrument as of March 31, 2006 is ¥5,462 million, asset
position.
In the year ended March 31, 2007, the subsidiary
exercised the forward sale contract, and there was no
balance of the derivative financial instrument as of
March 31, 2007.
(c) The fair values of foreign currency forward exchange contracts, foreign currency option contracts and foreign currency swap
agreements are included in other liabilities and other current assets/liabilities in the consolidated balance sheets as follows
(see note 9):
U.S. dollars
Yen (millions)
(millions) (note 2)
2006 2007 2007
Other current assets ¥(04,477 ¥0(3,735 $(032
Other current liabilities (35,113) (24,783) (210)
Other liabilities (866) ——
¥(31,502) ¥(21,048) $(178)
(d) The fair values of interest rate swap agreements are included in other assets/liabilities and other current assets/liabilities in
the consolidated balance sheets as follows (see note 9):
U.S. dollars
Yen (millions)
(millions) (note 2)
2006 2007 2007
Other current assets ¥03,101 ¥03,890 $(33
Other assets 33,233 6,976 59
Other current liabilities —(2,417) (20)
Other liabilities (2) ——
¥36,332 ¥(8,449 $(72
The estimated fair values have been determined using
relevant market information and appropriate valuation method-
ologies. However, these estimates are subjective in nature and
involve uncertainties and matters of significant judgment and,
therefore, cannot be determined with precision. The effect of
using different assumptions and/or estimation methodologies
may be significant to the estimated fair values.
The methodologies and assumptions used to estimate the
fair values of financial instruments are as follows:
Cash and cash equivalents, trade receivables and trade
payables
The carrying amounts approximate fair values because of the
short maturity of these instruments.
Finance subsidiaries-receivables
The fair values of retail receivables and term loans to dealers
were estimated by discounting future cash flows using the
current rates for these instruments of similar remaining
maturities. Given the short maturities of wholesale receiv-
ables, the carrying amount of such receivables approximates
fair value. The fair value of the retained interest in the sold
pools of finance receivables were estimated by calculating
the present value of the future cash flows using a discount
rate commensurate with the risks involved.
Marketable securities
The fair value of marketable securities was estimated using
quoted market prices.