Page 216 - 2017 TSMC Annual Report

In the fourth quarter of 2017, the Company reassessed the bid-ask spread and the transaction volume of the fixed income securities in determining whether there were quoted prices in active markets. Accordingly, the Company classified the fair value hierarchy levels of corporate bonds and bonds payable as level 2. To have consistent comparative basis, the Company had revised prior year classification from level 1 to level 2.
Valuation techniques and assumptions used in Level 2 fair value measurement
The fair values of corporate bonds, negotiable certificate of deposit, and structured products are determined by quoted market prices.
The fair value of commercial paper is determined by the present value of future cash flows based on the discounted curves that are derived from the quoted market prices.
The fair value of the Company’s bonds payable is determined by quoted market prices. 34. RELATED PARTY TRANSACTIONS
Intercompany balances and transactions between TSMC and its subsidiaries, which are related parties of TSMC, have been eliminated upon consolidation; therefore those items are not disclosed in this note. The following is a summary of significant transactions between the Company and other related parties:
a.
Related party name and categories
Related Party Name
GUC
VIS
SSMC
Xintec
Mutual-Pak
TSMC Education and Culture Foundation TSMC Charity Foundation
Related Party Categories
Associates Associates Associates Associates Associates
Other related parties Other related parties
b.
Netrevenue
Item
Net revenue from sale of goods
Net revenue from royalties
Years Ended December 31
Related Party Categories
Associates
Other related parties
Associates
$
2017
8,495,937 133
$
2016
5,929,141 -
- 68 -
- 68 -
$ 8,496,070 $ 482,537
$ 5,929,141 $ 516,749