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10
INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
The Company recognized the loss on obsolescence and the devaluation of inventories of $853,946 under non-
operating expenses
and losses for the year ended December 31, 2008. However, it has been reclassified to cost of goods sold in order to conform
with the presentation of the financial statements as of and for the year ended December 31, 2009, for purposes of comparison. In
addition, in 2009, the net realizable value of inventories has increased because the factor that caused the inventory devaluation in
prior period has improved, therefore, the Company recognized a gain from recovery in the value of inventories of $1,767,684,
which was credited to cost of goods sold for the year ended December 31, 2009. Also, in 2010, the carrying value of inventories
exceeded than the net realizable value thereof, therefore, the Company recognized a loss from devaluation of inventories of
$797,068, which was debited to cost of goods sold for the year ended December 31, 2010.
(Continued)
December 31, 2010
Notional amount (in
thousands) Maturity Date Range of Interest Rates
Paid
Range of Interest Rates Received
NTD 19,500,000 2012.2.21 2.18%~2.432%
NTD 90-day commercial paper
in secondary market average rate
(c)
For the years ended December 31, 2008, 2009 and 2010, the Company recognized net gain (loss) on valuation of financial
instruments as follows:
For the years ended December31,
2008 2009
2010
Realized Unrealized Realized Unrealized
Realized Unrealized
Foreign exchange forward contracts
$
69,788
151,819
(37,243
)
-
-
-
Foreign exchange swaps -
-
(42,848
)
-
2,713
-
Interest rate swaps
(344
)
(760,074
)
(414,123
)
184,446
(348,610
)
257,171
$
69,444
(608,255
)
(494,214
)
184,446
(345,897
)
257,171
(6)
Inventories, net
December 31,
2009
2010
Work in process
$
3,303,814
4,919,468
Less: allowance for inventory
(132,672
)
(928,856
)
Sub-total
3,171,142
3,990,612
Raw materials
283,342
513,213
Less: allowance for inventory
(427
)
(1,311
)
Sub-total
282,915
511,902
Materials and supplies in transit
1,983
3,150
$
3,456,040
4,505,664