Nintendo 2012 Annual Report Download - page 40

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The Company and certain consolidated subsidiaries lease tools, furniture and fixtures and other noncurrent assets.
Information of finance leases as of March 31, 2012 and 2011 were omitted as they are immaterial.
The rental commitments under noncancelable operating leases as of March 31, 2012 and 2011 were as follows:
Note 10. Leases
A. Condition of Financial Instruments
(1) Policy for measures relating to financial instruments
The Company and its consolidated subsidiaries use only financial assets with high degrees of safety such as deposits for the
management of funds. The Company and certain consolidated subsidiaries use derivatives to reduce risk as described below,
and for the purpose of yield improvement of short-term financial assets, and not for speculative purposes.
(2) Details of financial instruments, risks, and risk management system
Notes and accounts receivable-trade are exposed to credit risk of customers. In order to reduce the risk, the Company and
its consolidated subsidiaries monitor the credit status and transaction history, assess creditworthiness and set credit limit for
each customer. Since short-term investment securities and investment securities mainly comprise bonds held to maturity issued
by financial institutions that have high creditworthiness, the credit risk is minimal. Such bonds are also subject to foreign
currency exchange risk and market risk. The Company and its consolidated subsidiaries closely monitor the market value of
such bonds and the financial position of the issuer and review the status of these investments on a regular basis. Investment
securities include stocks of companies with which the Company has business relationships. These stocks are exposed to market
risk, however, the investment balance is immaterial.
Notes and accounts payable-trade and income taxes payable are all due within one year.
The Company and certain consolidated subsidiaries enter into foreign exchange forward contracts, non-deliverable forward
contracts and currency option contracts to reduce risk of exchange rate fluctuations arising from deposits and trade receivables
denominated in foreign currencies. Derivative transactions are exposed to foreign currency exchange risk. Derivative
transactions entered into by the Company and certain consolidated subsidiaries are made within the limits of foreign currency
deposits by the Finance Department or the department in charge of financial matters, after getting approval by the president
or the directors in charge. Status of derivative transactions is reported to the directors in charge and Board of Directors on a
regular basis. Since counterparties of such transactions are limited to financial institutions that have high creditworthiness, the
Company anticipates risk due to default is minimal.
(3) Supplementary explanation regarding fair value of financial instruments
Fair value of financial instruments is measured based on the quoted market price, if available, or rationally calculated values
if a quoted market price is not available. Because estimation of fair value incorporates variable factors, adopting different
assumptions might change the value. In addition, the contract amounts of the derivative transactions below in “Note 13.
Derivatives“ do not represent the market risk of derivative transactions.
Note 11. Financial Instruments
U.S. Dollars in Thousands
$
Japanese Yen in Millions
¥
Due within one year
Due after one year
Total
¥1,086
4,028
¥5,115
¥1,272
4,174
¥5,446
$13,252
49,129
$62,382
As of March 31, 2012 2011 2012
Notes to Consolidated Financial Statements