Audiovox 2004 Annual Report Download - page 102

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2002, 2003 and 2004
(Dollars in thousands, except share and per share data)
(c) Fair Value
The carrying value of all financial instruments classified as a current
asset or liability is deemed to approximate fair value because of the short
term maturity of these instruments. The estimated fair value of the
Company's financial instruments is as follows:
November 30, 2003 November 30, 2004
−−−−−−−−−−−−−−−−−−−−−−−−−−−−− −−−−−−−−−−−−−−−−−−−−−−−−−−−−
Carrying Fair Carrying Fair
Amount Value Amount Value
−−−−−−−−−− −−−−−−−−− −−−−−−−−−− −−−−−−−−−−
Short−term investments −− −− $124,237 $124,237
Investment securities (long−
term) $ 9,512 $ 9,512 $ 5,988 $ 5,988
Bank obligations $ 39,940 $ 39,940 $ 7,694 $ 7,694
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is
practicable to estimate that value:
Investment Securities/Short−Term Investments
The carrying amount represents fair value, which is based upon quoted
market prices at the reporting date (Note 1 of Notes to Consolidated
Financial Statements).
Long−Term Obligations
The carrying amount of the Company's foreign debt approximates fair
value because the interest rate on the debt is reset every quarter to
reflect current market rates.
Limitations
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial
instrument. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and, therefore,
cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.
99