Page 322 - TSMC 2022 Annual Report

7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets
Mandatorily measured at FVTPL Forward exchange contracts
Financial liabilities
Held for trading
Forward exchange contracts
December 31, 2022
$ 552,255
$ 17,468
December 31, 2021
$ 145,280
$ 636,472
The Company entered into forward exchange contracts to manage exposures due to fluctuations of foreign exchange rates. These forward exchange contracts did not meet the criteria for hedge accounting. Therefore, the Company did not apply hedge accounting treatment for these forward exchange contracts.
Outstanding forward exchange contracts consisted of the following:
December 31, 2022 Sell NT$ December 31, 2021 Sell NT$
Maturity Date
January 2023 to March 2023 January 2022 to March 2022
Contract Amount (In Thousands)
NT$ 79,610,590 NT$ 132,734,482
December 31, 2022
$ 48,742,817 (10,341)
$ 48,732,476
8. FINANCIAL ASSETS AT AMORTIZED COST
Commercial paper
Less: Allowance for impairment loss
Refer to Note 30 for information relating to credit risk management and expected credit loss for financial assets at amortized cost.
9. HEDGINGFINANCIALINSTRUMENTS
The Company entered into forward exchange contracts to partially hedge foreign exchange rate risks associated with certain highly probable forecast transactions (capital expenditures). The hedge ratio is adjusted in response to the changes in the financial market and capped at 100%. The forward exchange contracts have maturities of 12 months or less.
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