Mazda 2012 Annual Report Download - page 44

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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
foreign-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, 2012, 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 which 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, 2012
Carrying
values
Fair
values Difference
Carrying
values
Fair
values Difference
Assets:
1) Trade notes and accounts receivable ¥ 166,008 ¥ — ¥ — $ 2,024,488 $ — $ —
Allowance for doubtful receivables (*1) (254) — — (3,098) — —
Trade notes and accounts receivable, net 165,754 165,750 (4) 2,021,390 2,021,341 (49)
2) Investment securities
Available-for-sale securities 5,466 5,466 — 66,659 66,659 —
3) Long-term loans receivable (*2) 5,481 — — 66,841 — —
Allowance for doubtful receivables (*3) (2,367) — — (28,866) — —
Long-term loans receivable, net 3,114 3,114 — 37,975 37,975 —
Total ¥ 174,334 ¥ 174,330 ¥ (4) $ 2,126,024 $ 2,125,975 $ (49)
Liabilities:
1) Trade notes and accounts payable ¥ 244,405 ¥ 244,405 ¥ — $ 2,980,549 $ 2,980,549 $ —
2) Other accounts payable 23,040 23,040 — 280,976 280,976 —
3) Short-term loans payable 65,842 65,842 — 802,951 802,951 —
4) Long-term debt 712,243 707,239 (5,004) 8,685,890 8,624,866 (61,024)
Total ¥1,045,530 ¥1,040,526 ¥(5,004) $12,750,366 $12,689,342 $(61,024)
Derivative instruments: (*4)
1) Hedge accounting not applied ¥ (2,510) ¥ (2,510) ¥ — $ (30,610) $ (30,610) $ —
2) Hedge accounting applied (5,717) (5,717) — (69,720) (69,720) —
Total ¥ (8,227) ¥ (8,227) ¥ — $ (100,330) $ (100,330) $ —
Notes to Consolidated Financial Statements
Mazda Annual Report 2012
42