AU OPTRONICS CORP | CIK:0001172494 | 3

  • Filed: 3/29/2018
  • Entity registrant name: AU OPTRONICS CORP (CIK: 0001172494)
  • Generator: DataTracks
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1172494/000095010318003972/0000950103-18-003972-index.htm
  • XBRL Instance: http://www.sec.gov/Archives/edgar/data/1172494/000095010318003972/auo-20171231.xml
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    • ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory
    7.
    Derivative Financial Instruments and Hedging Instruments
     
    (1)
    Derivative Financial Instruments
     
     
     
    December 31,
     
     
     
    2017
     
    2016
     
     
     
     
     
     
     
     
     
     
     
    (in thousands)
     
    Financial assets measured at fair value through profit or loss – current:
     
     
     
     
     
     
     
    Foreign currency forward contracts
     
    $
    70,366
     
     
    65,669
     
     
     
     
     
     
     
     
     
    Financial liabilities measured at fair value through profit or loss – current:
     
     
     
     
     
     
     
    Foreign currency forward contracts
     
    $
    106,597
     
     
    896,998
     
     
     
     
     
     
     
     
     
    Hedging derivative financial liabilities – current:
     
     
     
     
     
     
     
    Interest rate swap contracts
     
    $
    -
     
     
    3,540
     
     
    Refer to note 36 for the disclosure of the Company’s credit, currency and interest rate risks related to financial instruments.
     
    As of December 31, 2017 and 2016, outstanding foreign currency forward contracts were as follows:
     
    December 31, 2017
    Contract item
     
    Maturity date
     
    Contract amount
     
     
     
     
    (in thousands)
    Sell USD / Buy NTD
     
    Jan. 2018 – Feb. 2018
     
    USD213,100 / NTD6,377,672
    Sell USD / Buy JPY
     
    Jan. 2018 – Jun. 2018
     
    USD304,926 / JPY34,092,055
    Sell USD / Buy CNY
     
    Jan. 2018 – Apr. 2018
     
    USD137,000 / CNY903,800
    Sell EUR / Buy JPY
     
    Jan. 2018 – Feb. 2018
     
    EUR65,000 / JPY8,691,815
    Sell EUR / Buy CZK
     
    Jan. 2018 – Mar. 2018
     
    EUR3,280 / CZK83,502
    Sell USD / Buy MYR
     
    Jan. 2018 – Mar. 2018
     
    USD931 / MYR3,811
    Sell JPY / Buy NTD
     
    Jan. 2018
     
    JPY10,000,000 / NTD2,654,220
    Sell CNY / Buy JPY
     
    Jan. 2018 –  Apr. 2018
     
    CNY86,623 / JPY1,443,259
    Sell USD / Buy SGD
     
    Jan. 2018
     
    USD5,480 / SGD7,366
     
     
     
     
     
     
    December 31, 2016
    Contract item
     
    Maturity date
     
    Contract amount
     
     
     
     
    (in thousands)
    Sell USD / Buy NTD
     
    Jan. 2017 – Feb. 2017
     
    USD711,000 / NTD22,687,304
    Sell USD / Buy JPY
     
    Jan. 2017 – Mar. 2017
     
    USD126,730 / JPY13,860,716
    Sell NTD / Buy JPY
     
    Mar. 2017
     
    NTD1,474,085 / JPY5,400,000
    Sell USD / Buy CNY
     
    Jan. 2017 – Jun. 2017
     
    USD96,000 / CNY662,180
    Sell EUR / Buy JPY
     
    Mar. 2017
     
    EUR90,000 / JPY10,693,738
    Sell EUR / Buy CZK
     
    Jan. 2017 –  Feb. 2017
     
    EUR3,190 / CZK85,791
    Sell EUR / Buy USD
     
    Mar. 2017
     
    EUR41,000 / USD44,148
    Sell USD / Buy MYR
     
    Jan. 2017 – Mar. 2017
     
    USD741 / MYR3,296
    Sell JPY / Buy NTD
     
    Mar. 2017
     
    JPY50,000 / NTD13,725
    Sell CNY / Buy USD
     
    Jan. 2017 – Apr. 2017
     
    CNY359,763 / USD52,189
    Sell EUR / Buy NTD
     
    Jan. 2017
     
    EUR5,000 / NTD171,967
    Sell CNY / Buy JPY
     
    Jan. 2017 –  Jul. 2017
     
    CNY588,583 / JPY9,068,273
    Sell USD / Buy SGD
     
    Jan. 2017
     
    USD170,157 / SGD245,680
     
    Net gains (losses) of foreign currency forward contracts were as follows:
     
     
     
    For the years ended December 31,
     
     
     
    2017
     
    2016
     
    2015
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    (in thousands)
     
    Unrealized gains (losses)
     
    $
    795,098
     
     
    (491,860)
     
     
    (240,002)
     
    Realized gains
     
     
    850,936
     
     
    80,423
     
     
    1,179,119
     
     
     
    $
    1,646,034
     
     
    (411,437)
     
     
    939,117
     
     
    AUO entered into interest rate swap contracts with several banks to manage interest rate risk exposure arising from financing activities. As at December 31, 2017, there was no outstanding interest rate swap contract. As at December 31, 2016, AUO’s total notional amount of outstanding interest rate swap contracts amounted to $1,760,000 thousand which were related to effective hedges. For the years ended December 31, 2017, 2016 and 2015, no unrealized gains or losses resulting from change in fair value of interest rates swap contracts were recognized in profit and loss.
     
    (2)
    Hedge accounting
     
    The Company entered into Plain Vanilla type interest rate swap contracts as the primary hedging instrument. The Company paid interest based on fixed rate and received market floating-rate from the counterparty. The aforementioned hedging contracts were intended to protect the Company from the risk of future cash flow fluctuation of debt bearing floating interest rate. These contracts were designated as cash flow hedges and met the criteria for hedge accounting.
      
    Details of hedged items designated as cash flow hedges and their respective hedging derivative financial instruments were as follows:
     
    December 31, 2016
     
    Hedged item
     
    Hedging
    instrument
     
    Fair value
    of hedging
    instrument
     
    Expected
    period of
    cash flows
     
    Expected
    period of
    recognition in
    comprehensive
    income
     
     
     
     
     
    (in thousands)
     
     
     
     
     
    Long-term borrowings with floating interest rate
     
    Interest rate swap contracts
     
    $
    (3,540)
     
    Jan. 2017 – Aug. 2017
     
    Jan. 2017 – Aug. 2017