Casio 2010 Annual Report Download - page 34

32 CASIO COMPUTER CO., LTD.
2) Details of financial instruments used and risks involved, and how they are managed
Notes and accounts receivable-trade are exposed to customers’ credit risk. To minimize that risk, the Group periodically monitors
the due date and the balance of the accounts.
Short-term investment securities and investment securities are primarily highly secure and highly-rated bonds and include shares
in companies with which the Group has business relations, and are exposed to market price fluctuation risk. The Group periodically
monitors the market price and reviews the status of these holdings.
Notes and accounts payable-trade and accounts payable-other have the due date of within one year.
Operating payables, loans payable, and bonds payable are subject to liquidity risk (the risk of an inability to pay by the due
date). However, the Group manages liquidity risk by maintaining short-term liquidity in excess of a certain level of consolidated sales
or by other means.
The Group use derivative transactions of forward currency exchange contracts to hedge currency fluctuation risks arising from
assets and liabilities denominated in foreign currencies, as well as interest rate swap contracts to fix the cash flows associated with
loans payable and bonds payable or to offset market fluctuation risks. The Group utilizes and manages derivative transactions
following the internal regulation for them, which stipulates policy, objective, scope, organization, procedures and financial
institutions to deal with, and has an implementation and reporting system for derivative transactions reflecting proper internal
control functions.
3) Supplemental information on fair values
The fair value of financial instruments is calculated based on quoted market price or, in case where there is no market price, by
making a reasonable estimation. Because the preconditions applied include a floating element, estimation of fair value may vary.
The contracted amounts, as presented in Note 8 “Derivative Transactions,” do not reflect market risk.
(2) Fair values of financial instruments
The following table summarizes book value and fair value of the financial instruments, and the difference between them as of
March 31, 2010. Items for which fair value is difficult to estimate are not included in the following table (see Note 2 below).
Millions of Yen Thousands of U.S. Dollars
Book value Fair value Difference Book value Fair value Difference
Assets
(1) Cash and deposits ..........................................................................
¥ 52,756 ¥ 52,756 ¥ — $ 567,269 $ 567,269 $ —
(2) Notes and accounts receivable–trade ............................................. 75,565 75,565 — 812,527 812,527 —
(3) Short-term investment securities and investment securities
a. Held-to-maturity debt securities .................................................
17,860 17,884 24 192,043 192,301 258
b. Available-for-sale securities ........................................................ 85,533 85,533 — 919,709 919,709 —
Total assets ............................................................................... ¥231,714 ¥231,738 ¥ 24 $2,491,548 $2,491,806 $ 258
Liabilities
(1) Notes and accounts payable–trade .................................................
¥ 66,219 ¥ 66,219 ¥ — $ 712,032 $ 712,032 $ —
(2) Short-term loans payable ............................................................... 15,846 15,846 — 170,387 170,387 —
(3) Accounts payable–other ................................................................. 38,422 38,422 — 413,140 413,140 —
(4) Bonds payable ............................................................................... 10,000 10,139 139 107,527 109,022 1,495
(5) Bonds with subscription rights to shares ......................................... 50,000 49,019 (981) 537,634 527,086 (10,548)
(6) Long-term loans payable ................................................................ 28,450 28,659 209 305,914 308,161 2,247
Total liabilities ........................................................................... ¥208,937 ¥208,304 ¥(633) $2,246,634 $2,239,828 $ (6,806)
Derivative transactions* ...................................................................... ¥ 31 ¥ 31 ¥ — $ 333 $ 333 $ —
* Derivative transactions are presented net of receivables and liabilities.
Note 1: Method for calculating the fair value of financial instruments and matters related to investment securities and
derivative transactions
Assets
(1) Cash and deposits, (2) Notes and accounts receivable–trade
Since these items are short-term and the fair value approximates the book value, the book value is used as fair value.
(3) Short-term investment securities and investment securities
The fair value of shares is the market price, while the fair value of bonds is the market price or the price quoted by the correspondent
financial institution. Since certificates of deposit and commercial paper are short-term, and the fair value approximates the book
value, the book value is used as fair value.
See Note 7 “Securities” for information on short-term investment securities categorized by holding purposes.
Notes to Consolidated Financial Statements Years ended March 31, 2010 and 2009 Casio Computer Co., Ltd. and Subsidiaries