Page 222 - TSMC 2018 Annual Report

f. Fair value of financial instruments
1) Fair value measurements recognized in the consolidated balance sheets
Fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
 Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
 Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
 Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
2) Fair value of financial instruments that are measured at fair value on a recurring basis
Fair value hierarchy
The following table presents the Company’s financial assets and liabilities measured at fair value on
a recurring basis:
Financial assets at FVTPL
Mandatorily measured at FVTPL Agency mortgage-backed
Level 1
December 31, 2018 Level 2 Level 3
$ 3,419,287 $ - 85,303 -
$ 3,504,590 $ -
Total
3,419,287 85,303
3,504,590
40,753,582
31,288,762 15,670,295 11,151,359
107,590
3,910,681 590,152 3,595,069
107,067,490
23,497 (Continued)
securities $ - Forward exchange contracts -
$ -
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds $ - Agency bonds/Agency
mortgage-backed securities - Asset-backed securities - Government bonds 11,006,167 Commercial paper -
Investments in equity instruments Non-publicly traded equity
investments - Publicly traded stocks 590,152 Notes and accounts receivable, net -
$ 11,596,319
Hedging financial assets
Cash flow hedges
Forward exchange contracts $ -
$
$
40,753,582 $ -
31,288,762 - 15,670,295 - 145,192 - 107,590 -
- 3,910,681
- - 3,595,069 -
91,560,490 $ 3,910,681
$ $
$
$
$
$ 23,497 $ -
- 75 -