Daiwa Securities Group Annual Report 2012 Thousands of U.S. dollars * Net receivables or payables derived from derivatives are presented on a net basis. The item that is a net liability in total is presented in parentheses. (Note 1) Accounting method of fair values of financial instruments (1), (3) Cash and cash equivalents and time deposits Cash and cash equivalents and time deposits are recorded as their  book value because fair values are similar to book value and they are  settled in the short term. borrowing money from securities finance companies and sold amount  equivalent of customers generated from margin transactions. Those  are stated as their book value as settled in the short term because the  former is marked to market and the latter is settled by reversing  trades by customers’ decision. (2) Cash segregated as deposits for regulatory purposes Cash segregated as deposits for regulatory purposes which consist of  cash segregated as deposits for customers and investments in secu- rities like government bonds are calculated based on reasonably  calculated prices utilizing yield spread with index interest rates for  each term which are defined by immediately previous traded prices  including the ones of similar bonds. (5), (16) Collateralized short-term financing agreements These are stated as their book value because fair values are similar to  book value and most of them are settled in the short term. (6), (17) Trading assets and trading liabilities (4), (14) Receivables related to margin transactions and payables  related to margin transactions Receivables related to margin transactions consist of lending money  to customers generated from margin transactions and collateral to  securities finance companies. Those are stated at their book value as  settled in the short term because the former is settled by reversing  trades by customers’ decision and the latter is collaterals marked to  market on lending and borrowing transactions. Payables related to margin transactions consist of customers’  (a) Trading securities and others 2012 Amounts on  consolidated  balance sheets Fair value Difference Assets (1)  Cash and cash equivalents $ 12,670,500 $ 12,670,500 $ – (2)  Cash segregated as deposits for regulatory purposes 2,493,634 2,493,634 – (3) Time deposits 262,037 262,037 – (4)  Receivables related to margin transactions 1,474,024 1,474,024 – (5)  Collateralized short-term financing agreements 69,941,366 69,941,366 – (6) Trading assets 108,255,488 108,255,488 – (7)  Securities, Private equity and other investments and Investment securities (a) Securities intended to be held for trading purposes 30,024 30,024 – (b) Held-to-maturity debt securities 6,874,244 6,878,951 4,707 (c) Subsidiaries companies’ stocks and related companies’ stocks – – – (d) Available-for-sale securities 13,457,427 Allowance for possible investment loss (92,061) 13,365,366 13,365,366 – (8)  Trade account receivables, net 1,696,293 1,696,293 – Total assets $217,062,976 $217,067,683 $ 4,707 Liabilities (9) Short-term borrowings $ 19,959,159 $ 19,959,159 $ – (10) Commercial paper 3,356,000 3,356,000 – (11) Long-term debt 27,807,951 26,364,232 1,443,719 (12) Deposits for banking business 14,267,268 14,261,890 5,378 (13) Payables to customers and counterparties 4,221,622 4,221,622 – (14) Payables related to margin transactions 643,366 643,366 – (15) Payables-other 230,451 230,451 – (16) Collateralized short-term financing agreements 74,004,634 74,004,634 – (17) Trading liabilities 72,600,976 72,600,976 – Total liabilities $217,091,427 $215,642,330 $1,449,097 Derivatives related to non-trading Derivatives to which hedge accounting is not applied $ (1,073) $ (1,073) $ – Derivatives to which hedge accounting is applied (44,354) (47,780) (3,426) Total derivatives related to non-trading $ (45,427) $ (48,853) $ (3,426) Equities and others closing price or closing quotations at  the main stock exchange Bonds reasonably calculated price based on  immediately previous traded price  including similar bonds (OTC and  broker screen etc.) or market value  information (trading price statistics  etc.) by utilizing spread with index  interest rate Units of Investment trust closing price or closing quotations at  exchange, or net asset value 75