Canon 2011 Annual Report Download - page 92

Download and view the complete annual report

Please find page 92 of the 2011 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.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

90 F I N A N C I A L S E C T I O N >N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Long-term debt, including current installments
Foreign exchange contracts:
Assets
Liabilities
Carrying
amount
Estimated
fair value
Carrying
amount
Estimated
fair value
Carrying
amount
Estimated
fair value
¥
(7,070)
4,718
(2,610)
¥
(7,053)
4,718
(2,610)
¥(9,260)
11,950
(913)
¥(9,245)
11,950
(913)
$(90,641)
60,487
(33,462)
$(90,423)
60,487
(33,462)
2010
Millions of yen Thousands of U.S. dollars
20112011
December 31
rulings, advice of legal counsel and other information and
events pertaining to a particular case. Based on its experi-
ence, although litigation is inherently unpredictable, Canon
believes that any damage amounts claimed in the specific
matters discussed above and other outstanding matters are
not a meaningful indicator of Canon’s potential liability. In
the opinion of management, any reasonably possible range of
losses from outstanding matters would not have a material
adverse effect on Canon’s consolidated financial position,
results of operations, or cash flows.
20. DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF
CREDIT RISK
Fair value of financial instruments
The estimated fair values of Canon’s financial instruments at
December 31, 2011 and 2010 are set forth below. The follow-
ing summary excludes cash and cash equivalents, trade
receivables, finance receivables, noncurrent receivables,
short-term loans, trade payables and accrued expenses for
which fair values approximate their carrying amounts. The
summary also excludes investments which are disclosed in
Note 3.
The following methods and assumptions are used to esti-
mate the fair value in the above table.
Long-term debt
The fair values of Canon’s long-term debt instruments are
based on the present value of future cash flows associated
with each instrument discounted using current market
borrowing rates for similar debt instruments of compara-
ble maturity.
Foreign exchange contracts
The fair values of foreign exchange contracts are measured
based on the market price obtained from financial institutions.
Limitations of fair value estimates
Fair value estimates are made at a specific point in time,
based on relevant market information and information
about the financial instruments. These estimates are subjec-
tive 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.
Concentrations of credit risk
At December 31, 2011 and 2010, one customer accounted for
approximately 17% and 21% of consolidated trade receiv-
ables, respectively. Although Canon does not expect that the
customer will fail to meet its obligations, Canon is poten-
tially exposed to concentrations of credit risk if the customer
failed to perform according to the terms of the contracts.