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106 Hitachi, Ltd. Annual Report 2010
28. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions are used to estimate the fair values of financial instruments:
Long-term debt
The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash flows using
the Company’s and its subsidiaries’ market interest rates for the same contractual terms.
Cash and cash equivalents, Trade receivables, Short-term debt and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Investments in securities, Subordinated interests resulting from securitization and Derivatives
Refer to note 29 for the methods and assumptions used to estimate the fair values.
The carrying amounts and estimated fair values of the financial instruments as of March 31, 2010 and 2009 are as follows:
Millions of yen Thousands of U.S. dollars
2010 2009 2010
Carrying
amounts
Estimated
fair values
Carrying
amounts
Estimated
fair values
Carrying
amounts
Estimated
fair values
Investments in securities:
Short-term investments . . . . . . . . . . . . . . . . . . ¥ 53,575 ¥ 53,575 ¥ 8,654 ¥ 8,654 $ 576,075 $ 576,075
Investments and advances . . . . . . . . . . . . . . . . 200,326 200,326 158,819 158,819 2,154,043 2,154,043
Derivatives (Effective Portion in
Other Current Assets):
Forward exchange contracts . . . . . . . . . . . . . . 2,624 2,624 2,475 2,475 28,215 28,215
Cross currency swap agreements . . . . . . . . . . 5,357 5,357 16,297 16,297 57,602 57,602
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . 3 3 31 31 32 32
Option contracts . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 11 11
Derivatives (Ineffective Portion in
Other Current Assets):
Forward exchange contracts . . . . . . . . . . . . . . 407 407 180 180 4,376 4,376
Cross currency swap agreements . . . . . . . . . . 3,268 3,268 414 414 35,140 35,140
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . – – – – – –
Option contracts . . . . . . . . . . . . . . . . . . . . . . . – – – – – –
Derivatives (Effective Portion in Other Assets):
Forward exchange contracts . . . . . . . . . . . . . . 27 27 34 34 290 290
Cross currency swap agreements . . . . . . . . . . 12,070 12,070 14,358 14,358 129,785 129,785
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . 999 999 496 496 10,742 10,742
Option contracts . . . . . . . . . . . . . . . . . . . . . . . – – – – – –
Derivatives (Ineffective Portion in Other Assets):
Forward exchange contracts . . . . . . . . . . . . . . 22 22 – – 237 237
Cross currency swap agreements . . . . . . . . . . 2,091 2,091 5,963 5,963 22,484 22,484
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . 11 11 – – 118 118
Option contracts . . . . . . . . . . . . . . . . . . . . . . . – – – – – –
Subordinated interests resulting
from securitization:
Other current assets . . . . . . . . . . . . . . . . . . . . 4,114 4,114 5,793 5,793 44,237 44,237
Advances and other . . . . . . . . . . . . . . . . . . . . . 111,303 111,303 117,672 117,672 1,196,806 1,196,806