Trend Micro 2010 Annual Report Download - page 29

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31
payable, trade, accounts payable, other, accrued expenses and accrued income and other
taxes are largely due within one year.
(3) Risk management structure for financial instruments
(i) Credit risk management (risks associated with the default etc., of business counter-
parties)
Regarding the trade receivables, the Company and each of its subsidiaries are
regularly monitoring the financial position of major business counter-parties, such as
clients, by checking the due date and balance for each business transaction, to ensure
earliest possible identification and mitigation of the potential bad debt associated with
the deterioration of their financial position.
(ii) Market risk management (including risks associated with foreign currency exchange
and interest rate fluctuation)
To manage risks involving fluctuations in the market price of marketable securities
and investment securities, the Company is regularly monitoring their market prices as
well as the financial positions of their issuers (clients and other business connections).
(iii) Liquidity risk management on fund raising (risk of the Company being unable to repay
within the due date)
To manage and mitigate liquidity risks, a cash management plan is prepared and
updated by the Administration Division when appropriate, while reasonable liquidity
on hand is maintained at all time.
(4) Supplementary explanation concerning fair values, etc. of financial instruments
Fair values of financial instruments comprise values based on market prices, and
reasonably calculated values if there is no market price. Such calculated values involve
certain variable factors and thus may vary depending on the different assumptions.