Letter To Shareholders - Mitac

10. OTHER INFORMATION
1) The fair values of the financial instruments.
Financial Assets
Book value
December 31, 2009 December 31, 2008
Quotations
in an active
market
Fair value
Evaluation
model
Book value
Quotations
in an active
market
Fair value
Evaluation
model
Financial assets with
fair value equal to
book value $ 19,249,959 $ - $ 19,249,959 $ 18,555,790 $ - $ 18,555,790
Available-for-sale
financial assets 1,858,385 1,858,385 - 1,283,106 1,283,106 -
Financial assets carried
at cost 1,456,963 - - 1,435,961 - -
$ 22,565,307 $ 1,858,385 $ 19,249,959 $ 21,274,857 $ 1,283,106 $ 18,555,790
Forward foreign
exchange $ 26,293 $ - $ 26,293 $ 11,977 $ - $ 11,977
Interest rate Swap $ - $ - $ - $ 1,045 $ - $ 1,045
December 31, 2009 December 31, 2008
Fair value
Fair value
Quotations
in an active
market
Evaluation
model
Quotations
in an active
market
Evaluation
model
Book value
Book value
Financial Liabilities
Financial liabilities
with fair value equal
to book value $ 19,883,843 $ - $ 19,883,843 $ 18,914,020 $ - $ 18,914,020
Bonds payable 240,500 237,734 - 1,740,500 1,712,369 -
Long term loans 1,500,000 - 1,500,000 - - -
$ 21,624,343 $ 237,734 $ 21,383,843 $ 20,654,520 $ 1,712,369 $ 18,914,020
Purchase of forward
foreign exchange $ 6,068 $ - $ 6,068 $ 88,995 $ - $ 88,995
The methods and assumptions used to measure the fair value of financial instruments are as
follows:
A. For short-term instruments, the fair values were determined based on their carrying
values because of the short maturities of the instruments. This method was applied to
Cash and cash equivalents, Notes receivable, Accounts receivable. Other receivables,
Other financial assets, Refundable deposits, Long term notes and accounts receivables,
Short-term loans, Notes payable, Accounts payable, Income tax payable, Accrued
expenses, Other payables, Provision for product warranty, Other current liabilities and
Deposit in. The book value of long-term loans is used as fair value as the loans bear
floating interest rates.
B. Available-for-sale financial instruments are based on the market value of securities.
C. Fair value of bonds payable is estimated using the market value.
D. The book value of long-term loans is used as fair value as the loans bear floating
interest rates.
E. Derivative financial instruments: The estimated fair values are the expected cash flow
(using rates quoted by financial institutions) if the contracts are terminated at the
balance sheet date, including unrealized gains or losses. The quotes from financial
institutions are available for most of the Company’s derivate financial instruments.
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