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The Group enters into derivative transactions based on regulations established by the Company. Based on policies approved by the
Chief Financial Officer (CFO), the finance division undertakes particular transactions and records them and also confirms the balance of
transactions with counterparties. In addition, the finance division reports on the content of transactions undertaken and changes in transac-
tion balances to the CFO and the chief of the accounting department.
(iii) Management of liquidity risk in financing activities
The Group prepares a cash flow projection and monitors its funding requirements. The Group also strives to diversify its sources of financing
in order to reduce liquidity risk.
(4) Supplementary explanation of fair value of financial instruments
The fair value of Financial Instruments is based on the market price, but in case a market price is not available, the fair value is reasonably
estimated. As variable factors are incorporated in the estimation of values, values may vary depending on the assumptions used. The con-
tract amount related to derivative transactions under “2. Fair value of financial instruments” does not express the market risk related to the
derivative transactions.
2. Fair value of financial instruments
Amounts recorded on the consolidated balance sheet as of March 31, 2010, fair values, and the variances between the two are as shown below.
Financial instruments for which it is extremely difficult to determine the fair value are not included in the table below (Note 2 stated below).
Yen
(millions)
U.S. Dollars
(thousands)
At March 31, 2010
Carrying value
in consolidated
balance sheet Fair value Variance
Carrying value
in consolidated
balance sheet Fair value Variance
Current assets
(1) Cash and cash equivalents ¥ 420,166 ¥ 420,166 ¥ — $ 4,517,914 $ 4,517,914 $ —
(2) Short-term investments 7,794 7,794 — 83,807 83,807 —
(3) Receivables, trade 921,349 9,906,978
Allowance for doubtful accounts*1(15,924) (171,226)
905,425 905,425 — 9,735,752 9,735,752 —
Investments and long-term loans
(4) Affiliates 16,601 37,518 20,917 178,505 403,419 224,914
(5) Others 103,553 103,553 — 1,113,474 1,113,474 —
Total assets 1,453,539 1,474,456 20,917 15,629,452 15,854,366 224,914
Current liabilities
(1) Short-term borrowings and current
portion of long-term debt 220,457 220,457 — 2,370,505 2,370,505 —
(2) Lease obligation 29,790 29,790 — 320,323 320,323 —
(3) Payables, trade 626,986 626,986 — 6,741,785 6,741,785 —
(4) Accrued expenses 334,458 334,458 — 3,596,323 3,596,323 —
Long-term liabilities
(5) Long-term debt 356,986 368,365 11,379 3,838,559 3,960,914 122,355
(6) Lease obligation 39,509 39,753 244 424,828 427,451 2,623
Total liabilities 1,608,186 1,619,809 11,623 17,292,323 17,417,301 124,978
Derivative transactions*2
(i) Transactions which do not qualify for
hedge accounting [1,557] [1,557] — [16,742] [16,742] —
(ii) Transactions which qualify for
hedge accounting [67] [67] — [720] [720] —
Total derivative transactions [1,624] [1,624] — [17,462] [17,462] —
*1 It comprises the allowance for doubtful accounts in respect to Receivables, trade, short-term loan receivable and others.
*2 The net amount of the assets and liabilities is shown. If the net amount is a liability, it is written in parentheses [ ].
115
FUJITSU LIMITED Annual Report 2010
Notes to Consolidated
Financial Statements