Mazda 2016 Annual Report Download - page 59

Basis of measuring fair value of financial instruments
The fair values of some financial instruments are based on market prices. When market prices are
unavailable, the fair values are based on reasonably estimated values. The estimated values may
vary depending on the assumptions and variables used in the estimation.
Assets
1) Trade notes and accounts receivable
Trade notes and accounts receivable with short maturities are stated at carrying value as it approx-
imates fair value. The fair values of other receivables are calculated by grouping the receivables
according to their time to maturity, and then by discounting the amount of those receivables by
group to present values. The discount rates used in computing the present values reflect the time
to maturity as well as credit risk.
2) Investment securities
As for listed stocks included in investment securities, their quoted prices on the stock exchange
are used as their fair values.
For notes on securities by classification, refer to “Securities” under Note 2, “Significant
Accounting Policies”, and Note 5, “Securities”.
3) Long-term loans receivable
Long-term loans receivable consist of variable interest loans. As such, the interest rates on these
loans reflect the market rates of interest within short periods of time. Also, the credit standings
of borrowers of these loans have not changed significantly since the execution of these loans.
Accordingly, the carrying values are used as the fair values of these loans receivable.
For loans receivable at a high risk, the fair value is calculated mainly based on amounts
estimated to be collectible through collateral and guarantees.
Liabilities
1) Trade notes and accounts payable, 2) Other accounts payable, and 3) Short-term debt
These payables are settled within short periods of time. Hence, their carrying values approximate
their fair values. Accordingly, carrying values are used as the fair values of these payables.
4) Long-term debt
a) Bonds payable
The fair value of bonds issued by the Group is based on the market price where such a price is
available. Otherwise, the sum of the present value of principal and interest payments is used as
the fair value of bonds payable. The discount rates used in computing the present value reflect
the time to maturity of the bonds as well as credit risk.
b) Long-term loans payable and c) Finance lease obligations
The fair value of these liabilities is calculated by the sum of the principal and interest payments
discounted to present value, using the imputed interest rate that would be required to newly
execute a similar borrowing or lease transaction.
For some long-term loans payable with variable interest rates, interest rate swaps are used as
a hedge against interest rate fluctuations. When such interest rate swaps meet certain hedging
criteria, the net amount to be paid or received under the interest rate swap contract is added to
or deducted from the interest on the long-term loans payable. In such cases, the resulting net
interest on the long-term loans payable is used in calculating the present value.
Derivative instruments
Refer to Note 15, “Derivative Financial Instruments and Hedging Transactions”.
Scheduled amounts of receivables were as follows:
Millions of yen Thousands of U.S. dollars
As of March 31, 2016
Within
1 year
Over 1 year,
within 5
years
Over 5 years,
within 10
years
Over 10
years
Within
1 year
Over 1 year,
within 5
years
Over 5 years,
within 10
years
Over 10
years
T rade notes and
accounts receivable ¥198,894 ¥ — ¥ — ¥ — $1,760,124 $ — $ — $ —
L ong-term loans
receivable 527 3,305 707 297 4,664 29,248 6,257 2,628
Total ¥199,421 ¥3,305 ¥707 ¥297 $1,764,788 $29,248 $6,257 $2,628
Millions of yen
As of March 31, 2015
Within
1 year
Over 1 year,
within 5
years
Over 5 years,
within 10
years
Over 10
years
T rade notes and
accounts receivable
¥215,161 ¥ — ¥ — ¥ —
L ong-term loans
receivable
354 5,365 366 305
Total ¥215,515 ¥5,365 ¥366 ¥305
For the schedule of repayment of long-term debt after the consolidated balance sheet date,
refer to Note 9, “Short-Term Debt and Long-Term Debt”.
Notes to Consolidated Financial Statements
MAZDA ANNUAL REPORT 2016
57 Financial Section
Message from
Management
Review of Operations
Drivers of Value Creation
Foundations Underpinning
Sustainable Growth
Contents