Samsung 2005 Annual Report Download - page 100

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98
The outstanding balance of financing receivables sold to
financial institutions as of December 31, 2005 and 2004, are
as follows (note 19):
Samsung Card Co., Ltd. has agreements with various financial
institutions to sell certain eligible financing receivables, subject
to recourse. Remittances of the sold accounts receivables
are collected by the consumer financing subsidiaries and
transferred to the buyers of the receivables on predetermined
due dates. These transferred financing receivables amounting
to \17,395 million (2004: \57,257 million) have been
accounted for as sales of receivables and accordingly have
not been recognized on the accompanying consolidated
balance sheets as of December 31, 2005.
In addition, Samsung Card Co., Ltd. has entered into
agreements (“Receivables Sale Agreements”) with several
financial institutions, whereby they will sell certain eligible
financing receivables in accordance with the Act on Asset
Backed Securitization of the Republic of Korea (the “ABS
Act”). Pursuant to the Receivables Sale Agreements,
Samsung Card Co., Ltd. formed Special Purpose Entities
(“SPEs”) for the sole purpose of buying receivables generated
by the consumer financing subsidiary. Under the Receivables
Sale Agreements, Samsung Card Co., Ltd., irrevocably
and with limited recourse, transfer certain eligible financing
receivables to the SPEs. Under the accounting principles
generally accepted in the Republic of Korea, these SPEs
are not required to be included in the consolidated financial
statements.
These transactions are accounted for as a sale of receivables
and as a result, the related receivables in an aggregate
amount of \4,017,978 million (2004: \5,369,189 million)
have been excluded from the accompanying consolidated
balance sheets as of December 31, 2005.
Note 9: Long-Term Available-For-Sale Securities and Long-Term Held-To-Maturity Securities
(1) Long-Term Available-For-Sale Securities
Long-term available-for-sale securities as of December 31, 2005 and 2004, consist of the following:
(in millions of Korean won) 2005 2004
Asset-backed securities
with limited recourse \4,017,978 \5,369,189
Financing receivables
with recourse 17,395 57,257
\4,035,373 \5,426,446
(in millions of Korean won) 2005 20041
Detail Recorded book
Value
Recorded book
Value
Fair-value investments (1) \ 1,581,740 \794,716
Cost-method investments (2) 645,150 457,800
Government and public bonds and others (3) 5,543 28,914
Funds 168 363
\2,232,601 \1,281,793
1 ClassⅡ beneficiary certificates accounted for as long-term available-for-sale securities as of December 31, 2004,
have been reclassified as long-term financing receivables (note 8).