MITSUBISHI ESTATE Annual Report 2014

worthiness of their main customers periodically, and monitors due dates and outstanding balances by individual customer. In addition, the Group is making efforts to identify and mitigate risks of bad debts from customers who are having financial difficulties.(b)Monitoring of market risks (the risks arising from fluctuations in foreign exchange rates, interest rates and others)In order to mitigate the interest rate risk for loans payable and bonds bearing interest at variable rates, the Group may also enter into interest rate swap and currency swap transactions.For marketable securities and investment securities, the Group periodically reviews the fair values of such financial instruments and the financial position of the issuers (business partners). In addition, the Group continuously evaluates whether securities other than those classified as held-to-maturity should be maintained taking into account their fair values and relationships with the issuers (business partners).(c)Monitoring of liquidity risk (the risk that the Group may not be able to meet its obligations on scheduled due dates)Based on the report from each division, the Group prepares and updates its cash flow plans on a timely basis and stabilizes liquidity to manage liquidity risk.(4) Supplementary explanation of the estimated fair value of financial instrumentsThe fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in different fair value. Estimated Fair Value of Financial InstrumentsCarrying value of financial instruments on the consolidated balance sheets as of March 31, 2014 and 2013 and unrealized gains (losses) are shown in the following table. The following table does not include financial instruments for which it is extremely difficult to determine the fair value. (Please refer to Note 2 below).Millions of yenThousands of U.S. dollars 2014Carrying ValueEstimated Fair ValueDierenceCarrying ValueEstimated Fair ValueDierence1) Cash on hand and in banks¥   224,121¥   224,121—$  2,177,625$  2,177,625—2) Notes and accounts receivable – trade28,539277,299 Allowance for doubtful receivables(*1)(208)(2,022)28,331 28,331 —275,276 275,276 —3) Securities and Investment securities (i) Held-to-maturity debt securities622635¥       126,0526,177$       124 (ii) Other securities190,975191,1411651,855,5741,857,1821,6084) Equity investments10,52610,526—102,281102,281—Total assets¥   454,578¥   454,756¥     178$  4,416,811$  4,418,544$    1,7331) Notes and accounts payable – trade¥   105,271¥   105,271—$  1,022,846$  1,022,846—2) Short-term borrowings63,76263,762—619,537619,537—3) Current portion of long-term borrowings343,127343,127—3,333,9233,333,923—4) Commercial paper——————5) Current portion of long-term bonds56,59556,595—549,901549,901—6) Long-term bonds645,000685,169¥40,1696,267,0036,657,306$390,302 7) Long-term borrowings855,052865,95110,8988,307,9348,413,831105,897Total liabilities¥2,068,810¥2,119,879¥51,068$20,101,147 $20,597,347 $496,199 Millions of yen2013Carrying ValueEstimated Fair ValueDierence1) Cash on hand and in banks¥   192,076¥   192,076—2) Notes and accounts receivable – trade29,925 Allowance for doubtful receivables(*1)(201)29,72429,724—3) Securities and Investment securities (i) Held-to-maturity debt securities624645¥       20 (ii) Other securities179,609179,7461374) Equity investments13,09713,097—Total assets¥   415,132¥   415,290¥     1571) Notes and accounts payable – trade¥     53,044¥     53,044—2) Short-term borrowings68,29168,291—3) Current portion of long-term borrowings166,445166,445—4) Commercial paper35,00035,000—5) Current portion of long-term bonds57,56757,567—6) Long-term bonds689,664736,636¥46,9727) Long-term borrowings1,058,2401,071,79113,550Total liabilities¥2,128,254¥2,188,777¥60,523(*1) The value of notes and account receivable-trade is shown at net value, after deducting allowance for doubtful accounts.ANNUAL REPORT 201467