Mazda 2011 Annual Report Download - page 62

Management of market risks (i.e., risks associated to fluctuations in foreign exchange rates and interest rates)
The Company and some of its consolidated subsidiaries hedge the risk of foreign exchange rate fluctuation on for-
eign-currency-denominated receivables and payables, using foreign exchange forward contracts, on a monthly and
individual currency basis. Foreign exchange forward contracts are executed as necessary, up to six months ahead at
longest, on foreign-currency-denominated receivables and payables that are expected to arise with certainty as a
result of forecasted export and import transactions.
The Company and some of its consolidated subsidiaries use interest rate swaps in order to reduce the risk of
interest rate fluctuation on loans payable.
For details on management of derivative transactions, refer to Note 15, “Derivative Financial Instruments and
Hedging Transactions.”
As regards short-term investments and investment securities, their fair values as well as the financial standing of
their issuing entities are monitored on a regular basis. Ownership of available-for-sale securities are reviewed on a
continuous basis.
Management of liquidity risks related to financing (i.e., risks of non-performance of payments on their due dates)
The liquidity risks of the Company and its consolidated subsidiaries are managed mainly through the preparation
and update of the cash schedule by the Treasury Department.
Fair values of financial instruments
As of March 31, 2011, the carrying values on the consolidated balance sheet, the fair values, and the differences
between these amounts, respectively, of financial instruments were as follows. Financial instruments whose fair
value is deemed highly difficult to measure are excluded from the following table.
Millions of yen Thousands of U.S. dollars
As of March 31, 2011
Carrying
values
Fair
values Difference
Carrying
values
Fair
values Difference
Assets
1) Trade notes and accounts receivable ¥154,498 ¥ — ¥ — $ 1,861,422 $ — $ —
Allowance for doubtful receivables (*1) (756) — — (9,108) — —
Trade notes and accounts receivable, net 153,742 153,724 (18) 1,852,313 1,852,096 (217)
2) Investment securities
Available-for-sale securities 5,714 5,714 — 68,843 68,843 —
3) Long-term loans receivable (*2) 5,405 — — 65,120 — —
Allowance for doubtful receivables (*3) (2,343) — — (28,229) — —
Long-term loans receivable, net 3,062 3,062 — 36,892 36,892 —
¥162,518 ¥162,500 ¥ (18) $ 1,958,048 $ 1,957,831 $ (217)
Liabilities
1) Trade notes and accounts payable ¥208,111 ¥208,111 ¥ — $ 2,507,361 $ 2,507,361 $ —
2) Other accounts payable 22,738 22,738 — 273,952 273,952 —
3) Short-term loans payable 79,447 79,447 — 957,193 957,193 —
4) Long-term debt 613,553 627,075 13,522 7,392,205 7,555,120 162,916
¥923,849 ¥937,371 ¥13,522 $11,130,711 $11,293,627 $162,916
Derivative instruments (*4)
1) Hedge accounting not applied ¥ (362) ¥ (362) ¥ — $ (4,361) $ (4,361) $ —
2) Hedge accounting applied (4,746) (4,746) — (57,181) (57,181) —
¥ (5,108) ¥ (5,108) ¥ — $ (61,542) $ (61,542) $ —
(*1) Allowance for doubtful receivables, which is recognized on the basis of each individual accounts receivable, is deducted.
(*2) Long-term loans receivable include those due within one year, which are included in “other current assets” on the consolidated balance sheet.
(*3) Allowance for doubtful receivables, which is recognized on the basis of each individual long-term loans receivable, is deducted.
(*4) Receivables and payables resulting from derivative transactions are offset against each other and presented on a net basis; when a net liability results,
the net amount is shown in ().
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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