Canon 2010 Annual Report Download - page 98
Download and view the complete annual report
Please find page 98 of the 2010 Canon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.CANON ANNUAL REPORT 201096
December 31
Millions of yen
Thousands of
U.S. dollars
2010 2009 2010
To sell foreign currencies ¥466,361 ¥494,314 $5,757,543
To buy foreign currencies 48,686 30,978 601,062
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CANON INC. AND SUBSIDIARIES
Cash fl ow hedge
Changes in the fair value of derivative fi nancial instruments
designated as cash fl ow hedges, including foreign exchange
contracts associated with forecasted intercompany sales, are
reported in accumulated other comprehensive income (loss).
These amounts are subsequently reclassifi ed into earnings
through other income (deductions) in the same period as the
hedged items affect earnings. Substantially all amounts record-
ed in accumulated other comprehensive income (loss) at year-
end are expected to be recognized in earnings over the next 12
months. Canon excludes the time value component from the
assessment of hedge effectiveness. Changes in the fair value of
a foreign exchange contract for the period between the date
that the forecasted intercompany sales occur and its maturity
date are recognized in earnings and not considered hedge inef-
fectiveness.
Derivatives not designated as hedges
Canon has entered into certain foreign exchange contracts to
primarily offset the earnings impact related to fl uctuations in
foreign currency exchange rates associated with certain assets
denominated in foreign currencies. Although these foreign
exchange contracts have not been designated as hedges as
required in order to apply hedge accounting, the contracts are
effective from an economic perspective. The changes in the fair
value of these contracts are recorded in earnings immediately.
Contract amounts of foreign exchange contracts as of
December 31, 2010 and 2009 are set forth below:
Derivatives designated as hedging instruments
December 31 Fair value
Millions of yen
Thousands of
U.S. dollars
Balance sheet location 2010 2009 2010
Assets:
Foreign exchange contracts Prepaid expenses and
other current assets ¥2,487 ¥ — $ 30,704
Liabilities:
Foreign exchange contracts Other current liabilities 426 644 5,259
Derivatives not designated as hedging instruments
December 31 Fair value
Millions of yen
Thousands of
U.S. dollars
Balance sheet location 2010 2009 2010
Assets:
Foreign exchange contracts Prepaid expenses and
other current assets ¥9,463 ¥ 752 $116,827
Liabilities:
Foreign exchange contracts Other current liabilities 487 6,566 6,013
Fair value of derivative instruments in the consolidated balance sheets
The following tables present Canon’s derivative instruments measured at gross fair value as refl ected in the consolidated balance
sheets as of December 31, 2010 and 2009.