Toshiba 2007 Annual Report Download - page 107

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41
40
(2)FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company’s financial instruments at March 31, 2007 and 2006 are summarized as follows:
Millions of yen
2007 2006
Carrying Estimated Carrying Estimated
March 31 amount fair value amount fair value
Nonderivatives:
Liabilities:
Long-term debt, including current portion ¥(1,044,152) ¥(1,114,148) ¥(741,102) ¥ (793,470)
Derivative financial instruments:
Forward exchange contracts 1,408 1,408 (989) (989)
Interest rate swap agreements (799) (799) (1,161) (1,161)
Currency swap agreements (797) (797) 153 153
Currency options (41) (41) (810) (810)
Thousands of U.S. dollars
2007
Carrying Estimated
March 31 amount fair value
Nonderivatives:
Liabilities:
Long-term debt, including current portion $(8,848,746) $ (9,441,932)
Derivative financial instruments:
Forward exchange contracts 11,932 11,932
Interest rate swap agreements (6,771) (6,771)
Currency swap agreements (6,754) (6,754)
Currency options (347) (347)
The above table excludes the financial instruments for which fair values approximate their carrying amounts and those related
to leasing activities. The table also excludes marketable securities and other investments which are disclosed in Note 4.
In assessing the fair value of these financial instruments, the Company uses a variety of methods and assumptions, which are
based on estimates of market conditions and risks existing at that time. For certain instruments, including cash and cash equiv-
alents, notes and accounts receivable-trade, short-term borrowings, notes payable-trade, accounts payable-trade and accounts
payable-other and accrued expenses, it is assumed that the carrying amount approximated fair value for the majority of these
instruments because of their short maturities. Quoted market prices are used for a part of marketable securities and other
investments. For long-term debt, fair value is estimated using market quotes, or where market quotes are not available, using
estimated discounted future cash flows. Other techniques, such as estimated discounted value of future cash flows, and
replacement cost, are used to determine fair value for the remaining financial instruments. These estimated fair values are not
necessarily indicative of the amounts that could be realized in a current market exchange.