SMFG Notes to Consolidated Financial Statements Liabilities 5) Monetary claims bought: 6) Trading assets: 7) Money held in trust: 8) Securities. 8) Securities: 9) Foreign exchanges: 7) Trading liabilities: SMFG  2011 104 bankrupt borrowers and potentially bankrupt borrowers,  expected losses on such claims are calculated based on  either the present value of expected future cash flows or the  expected recoverable amount from collateral or guarantees.  Since the claims’ balance sheet amounts at the closing  date minus the current expected amount of loan losses  approximate their fair values, such amounts are regarded as  their fair values. The fair values of monetary claims bought with market  prices, such as beneficial interests in commodities invest- ment trusts, are based on their market prices as of the end  of the fiscal year. The fair values of subordinated trust  beneficiary interests related to securitized housing loans  are based on the assessed value of underlying assets minus  the assessed value of senior beneficial interests, etc. The  fair values of other transactions are, in principle, based on  prices calculated using methods similar to the methods  applied to 9) Loans and bills discounted. The fair values of bonds and other securities held for trad- ing purposes are, in principle, based on their market price  at the final date of the fiscal year. The fair values of money held in trust are, in principle,  based on the market prices of securities held in trust  calculated using methods similar to the methods applied to  In principle, the fair values of stocks (including foreign  stocks) are based on the average market price during 1  month before the end of the fiscal year. The fair values of  bonds and securities with market prices other than stocks  are prices calculated based on their market prices on the  final date of the fiscal year. In light of the “Practical Solution on Measurement of  Fair Value for Financial Assets” (ASBJ Practical Issues  Task Force No. 25), the fair values of floating-rate Japanese  government bonds are based on the present value of future  cash flows (the government bond yield is used to discount  and estimate future cash flows). Bond yield and yield  volatility are the main price parameters. The fair values  of those without market prices, such as private placement  bonds, are based on the present value of future cash flows  calculated by discounting estimated future cash flows tak- ing into account the borrower’s internal rating and pledged  collateral by a rate comprising a risk-free interest rate and  an overhead ratio. However, the fair values of bonds issued  by bankrupt borrowers, effectively bankrupt borrowers and  potentially bankrupt borrowers are based on the bond’s  face value after the deduction of the expected amount of a  loss on the bond computed using the same method applied  to the estimation of a loan loss. The fair values of publicly  offered investment trusts are calculated based on the  published net asset value (NAV) per share, while those of  private placement investment trusts are calculated based on  the NAV published by securities firms and other financial  institutions. The fair values of exchange-traded derivatives are based on  their closing prices. With regard to OTC transactions, the  fair values of interest rate, currency, stock, bond and credit  derivatives are based on their settlement prices as at the  end of the fiscal year calculated based on the present value  of the expected future cash flows or using valuation tech- niques such as the option pricing model. The fair values  of commodity derivatives transactions are based on their  settlement prices as at the end of the fiscal year, calculated  based on the derivative instrument’s components, includ- ing price and contract term. The fair values of foreign exchange related short-term  borrowings are based on their book values, as their book  values are regarded to approximate their fair values. Derivatives transactions The fair values of foreign currency-denominated deposits  without maturity received from other banks are based on  their book values as at the end of the fiscal year. The fair values of bonds sold for short sales and other  securities for trading purposes are, in principle, based on  their market prices on the final date of the fiscal year. The fair values of demand deposits and deposits without  maturity are based on their book values as at the end of the  fiscal year. The fair values of short-term transactions with  remaining life as of the end of the fiscal year not exceeding  6 months are also based on their book values, as their book  values are regarded to approximate their fair values. The  fair values of transactions with a remaining life of more  than 6 months are, in principle, based on the present value  of future cash flows calculated using the rate applied to the  same type of deposits that are newly accepted until the end  of the remaining life. The fair values of short-term transactions with remaining  life as of the end of the fiscal year not exceeding 6 months  are based on their book values, as their book values are  regarded to approximate their fair values. For transactions  with a remaining life of more than 6 months, their fair  values are, in principle, based on the present value of future  cash flows calculated using the refinancing rate applied to  the same type of instruments for the remaining life. The  fair values of bonds are based on the present value of future  cash flows calculated using the rate derived from the data  on the yields of benchmark bonds and publicly offered  subordinated bonds published by securities firms. 1) Deposits, 2) Negotiable certificates of deposit and  12) Due to trust account: 3) Call money and bills sold, 4) Payables under repurchase  agreements, 5) Payables under securities lending transac- tions, 6) Commercial paper, 8) Borrowed money,  10) Short-term bonds and 11) Bonds: