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## (b) Derivative transactions 

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Concerning OTC derivatives, both credit risk and liquidity risk equivalent to the amount of the counterparty are added to the fair value if necessary. 

## (7) Securities, Private equity and other investments and investment securities 

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## (8) Trade account receivables, net 

Trade account receivables, net is stated as their book value because fair values are similar to book value and they are settled in the short term. 

## (9), (10) Short-term borrowings and commercial paper 

These are stated as their book value because they are settled in the short term and fair value is similar to book value. 

## (11) Long-term debt 

Concerning fair values of bonds and notes due within one year, these are stated as their book value since the terms of the settlement period are short and the fair values approximate the book values. 

Concerning fair values of bonds whose maturities are longer than one year, in the case that market prices (trading price statistics, etc.) are available in the market, fair values are calculated from the market prices. If the market prices are not available, fair values are calculated from book values which are adjusted with consideration of interest rate fluctuations from the issuances and changes of credit spread of the Company. The credit spread of the Company is referred to interest rate of the latest issuance or market prices of similar bonds issued by the Company, etc. 

Concerning fair value of long-term debts, these are calculated from book values which are adjusted with consideration of interest rate fluctuations from the issuances and changes of credit spread of the Company. The credit spread of the Company is referred to interest rates of the latest issuance or market prices of similar bonds issued by the Company, etc. 

## (12) Deposits for banking business 

For demand deposits, the payment amounts required at the end of the fiscal year are considered as fair value. 

In addition, fair values of fixed deposits are calculated by classifying them based on their terms and by discounting the future cash flows. 

Discount rate is calculated by yield curve which includes credit spread of the Group. For the fixed deposits whose maturity date is within one year, their book value is considered as their fair value because the fair value is close to the book value. 

## (13), (15) Payables to customers and counterparties and payables-other 

These are mainly composed of deposit received and cash deposits received as guarantee. 

Deposits received are mainly deposits received from customers and payment amount (book value) when settled at the end of fiscal year is considered as fair value. Other deposits are stated as their book value since the terms of the settlement period are short and the fair values approximate the book values. 

Cash deposits received as guarantee are mainly deposits as guaran- tee relating to derivative transactions and stated as their book value as the terms of the settlement period deemed to be short with those characteristics which are marked to market for each transaction. Concerning the other cash deposits received as guarantee from cus- tomers, the payment amount (book value) when settled at the end of this fiscal year is considered as fair values. 

