D-Link 2005 Annual Report Download - page 56
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D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
December 31, 2004
Contract Contract Amount (in thousands) Maturity
Put option (buy) USD 13,000 Jan. 2005
Call option (buy) EUR 4,000 Jan. ~ Feb. 2005
Call option (sell) USD 67,000 Jan. ~ Mar. 2005
Call option (sell) AUD 6,000 Jan. ~ Feb. 2005
Call option (sell) EUR 11,000 Jan. ~ Feb. 2005
Call option (sell) CAD 3,000 Mar. 2005
As of December 31, 2005 and 2004, the aforementioned options’ fair value was
$31,779 thousand and $(13,481) thousand, respectively.
According to an interpretation issued by the Accounting Research and Development
Foundation, foreign currency option contracts that do not qualify as hedges are
marked to market, with changes in value recognized in other unrealized expense.
D-Link recognized such realized expense of about $4,561 thousand and $15,000
thousand in 2005 and 2004, respectively.
The realized gain resulting from foreign currency option contracts was $18,520
thousand and $6,019 thousand in 2005 and 2004, respectively.
(ii) Forward foreign currency exchange contracts
As of December 31, 2005 and 2004, the notional principals of outstanding forward
foreign currency exchange contracts were as follows:
December 31,
2005 2004
USD $ 125,998 93,779
CAD 12,000 -
The details of the above forward foreign currency exchange contracts’ balance as of
December 31, 2005 and 2004, were as follows:
December 31,
2005 2004
Forward foreign currency exchange contract receivable $ 4,527,149 3,022,903
Forward foreign currency exchange contract payable (4,476,761) (2,957,007)
Discount on forward foreign currency exchange contract 1,424 1,871
Forward foreign currency exchange contract receivable $ 51,812 67,767
Fair value $ 49,628 64,767