Asus 2008 Annual Report Download - page 205

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201
ASUSTEK COMPUTER INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In thousands of New Taiwan dollars unless otherwise stated)
(2) The following methods and assumptions were used for determining the fair value of
financial instruments:
The fair value of short-term financial instruments was estimated to approximate their
book value due to their short maturity. This method is used to determine the fair
value for cash and cash equivalents, receivables, payables, and short-term loans.
The fair value of financial assets at fair value through profit or loss-current,
available-for-sale financial assets-current and available-for-sale financial
assets-noncurrent was based on their quoted market price.
The fair value of refundable deposits and deposits received was based on their book
value because the amount the Company and subsidiaries expected to receive or
refund is equal to their book value.
The fair value of financial liabilities at fair value through profit or loss was measured
on a basis of the value of call/put option and conversion right with clause of
adjusting price. The fair value of bonds payable was determined using valuation
models.
The fair value of long-term loans was estimated by the discounted value of expected
cash flows. The discount rate used was based on the interest rate of long-term loans
with similar maturity profile and conditions.
The fair value of derivative financial instruments is the amount the Company and
subsidiaries will receive or pay if the Company and subsidiaries terminate the
contracts. Generally, such amount includes the unrealized gain or loss. The fair
value of most derivative financial instruments of the Company and subsidiaries are
determined based on the quotations from financial institutions. If there are no
quotations for the instruments, they shall be estimated by other valuation models.