Fair Value

12 Months Ended

Mar. 31, 2011

Fair Value

Fair Value

(18) Fair Value

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents, Time deposits, Trade receivables, Short-term debt, Trade payables and Accrued expenses

The carrying amount approximates fair value because of the short maturity of these instruments.

Investments and advances

The fair value of investments and advances is estimated based on quoted market prices or the present value of future cash flows using appropriate current discount rates.

Long-term debt, including current portion

The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash flows using appropriate current discount rates.

Derivative financial instruments

The fair value of derivative financial instruments, all of which are used for hedging purposes, is estimated based on unadjusted market prices or quotes obtained from brokers, which are periodically validated by pricing models using observable inactive market inputs.

The estimated fair values of financial instruments, all of which are held or issued for purposes other than trading, at March 31, 2011 and 2010 are as follows:

	Yen (millions)
	2011						2010
	Carrying amount			Fair value			Carrying amount			Fair value
Non-derivatives:
Assets:
Other investments and advances		409,938			410,023			454,313			454,516
Liabilities:
Long-term debt, including current portion		(1,535,858	)		(1,548,251	)		(1,236,052	)		(1,250,048	)
Derivatives:
Other current assets:
Forward:
To sell foreign currencies		1,420			1,420			3,511			3,511
To buy foreign currencies		451			451			5,494			5,494
Cross currency swaps		—			—			—			—
Interest rate swaps		0			0			23			23
Commodity futures:
To sell commodity		—			—			—			—
To buy commodity		20,390			20,390			12,561			12,561
Other current liabilities:
Forward:
To sell foreign currencies		(4,536	)		(4,536	)		(2,390	)		(2,390	)
To buy foreign currencies		(3,286	)		(3,286	)		(1,888	)		(1,888	)
Cross currency swaps		(462	)		(462	)		(283	)		(283	)
Commodity futures:
To sell commodity		(5,333	)		(5,333	)		(4,576	)		(4,576	)
To buy commodity		—			—			—			—

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The provisions of ASC 820 defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

Level 1 —	Quoted prices (unadjusted) in active markets for identical assets.
Level 2 —	Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 —	Unobservable inputs for the asset or liability.

The following table represents assets and liabilities that are measured at fair value on a recurring basis at March 31, 2011 and 2010:

	Yen (millions)
	2011
	Level 1			Level 2			Level 3		Total
Assets:
Available-for-sale securities:
Equity securities		313,813			—			—		313,813
Corporate and government bonds		—			2,201			—		2,201
Other debt securities		—			546			—		546
Total available-for-sale securities		313,813			2,747			—		316,560
Derivatives:
Foreign exchange contracts		—			1,871			—		1,871
Interest rate swaps		—			0			—		0
Commodity futures		18,564			1,826			—		20,390
Total derivatives		18,564			3,697			—		22,261
Total		332,377			6,444			—		338,821
Liabilities:
Derivatives:
Foreign exchange contracts		—			(7,822	)		—		(7,822	)
Cross currency swaps		—			(462	)		—		(462	)
Commodity futures		(2,427	)		(2,906	)		—		(5,333	)
Total derivatives		(2,427	)		(11,190	)		—		(13,617	)
Total		(2,427	)		(11,190	)		—		(13,617	)

	Yen (millions)
	2010
	Level 1			Level 2			Level 3		Total
Assets:
Available-for-sale securities:
Equity securities		379,358			—			—		379,358
Corporate and government bonds		—			3,961			—		3,961
Other debt securities		—			585			—		585
Total available-for-sale securities		379,358			4,546			—		383,904
Derivatives:
Foreign exchange contracts		—			9,005			—		9,005
Interest rate swaps		—			23			—		23
Commodity futures		12,561			—			—		12,561
Total derivatives		12,561			9,028			—		21,589
Total		391,919			13,574			—		405,493
Liabilities:
Derivatives:
Foreign exchange contracts		—			(4,278	)		—		(4,278	)
Cross currency swaps		—			(283	)		—		(283	)
Commodity futures		(3,345	)		(1,231	)		—		(4,576	)
Total derivatives		(3,345	)		(5,792	)		—		(9,137	)
Total		(3,345	)		(5,792	)		—		(9,137	)

The Company's existing marketable equity securities and commodity futures are included in Level 1, which are valued using an unadjusted quoted market price in active markets with sufficient volume and frequency of transactions.

Level 2 available-for-sale securities include all debt securities, which are valued using inputs other than quoted prices that are observable. Level 2 derivatives including foreign exchange contracts and commodity futures are valued using quotes obtained from brokers, which are periodically validated by pricing models using observable market inputs, such as foreign currency exchange rates and market prices for commodity futures.

The following table presents assets and liabilities that are measured at fair value on a nonrecurring basis for the years ended March 31, 2011 and 2010:

	Yen (millions)
	2011
	Total  gains (losses)			Fair value
				Level 1		Level 2		Level 3		Total
Assets:
Investments in associated companies		(8,318	)		23,196		—		2,933		26,129
Long-lived assets		(34,692	)		—		—		31,114		31,114

	Yen (millions)
	2010
	Total  gains (losses)			Fair value
				Level 1		Level 2		Level 3		Total
Assets:
Investments in associated companies		(3,605	)		1,058		—		1,980		3,038
Long-lived assets		(79,259	)		—		—		27,800		27,800
Goodwill		(3,745	)		—		—		0		0

During the year ended March 31, 2011, the Company classified most of assets described above in Level 3 as the Company used unobservable inputs to value these assets when recognizing impairment losses related to the assets. The fair value for the major assets was measured through estimated future cash flows. The Company classified certain investments in Level 1 as the Company used an unadjusted quoted market price in active markets as input to value the investment.

During the year ended March 31, 2010, the Company classified most of assets described above in Level 3 as the Company used unobservable inputs to value these assets when recognizing impairment losses related to the assets. The fair value for the major assets was measured through estimated future cash flows. The Company classified certain investments in Level 1 as the Company used an unadjusted quoted market price in active markets as input to value the investment.