Page 352 - TSMC 2022 Annual Report

30. FINANCIALINSTRUMENTS
a. Categories of financial instruments
Financial assets
FVTPL (Note 1) FVTOCI (Note 2) Amortized cost (Note 3)
Financial liabilities FVTPL (Note 4) Amortized cost (Note 5)
December 31, 2022
December 31, 2021
$ 145,280 5,198,309 586,299,180
$ 591,642,769
$ 636,472 1,026,450,717
$ 1,027,087,189
$
552,255 8,340,347 903,070,406
$ 911,963,008
$ 17,468 1,161,623,982
$ 1,161,641,450
Note 1: Note 2: Note 3:
Note 4: Note 5:
Financial assets mandatorily measured at FVTPL.
Including notes and accounts receivable (net) and equity investments.
Including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (including related parties), other receivables, refundable deposits, and temporary payments (classified under other current assets and other noncurrent assets).
Held for trading.
Including short-term loans, accounts payable (including related parties), payables to contractors and equipment suppliers, cash dividends payable, accrued expenses and other current liabilities, bonds payable, guarantee deposits and other noncurrent liabilities.
b. Financial risk management objectives
The Company manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.
The plans for material treasury activities are reviewed by the Audit Committees (rename to Audit and Risk Committee from February 14, 2023) and/or Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the Company must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.
c. Market risk
The Company is exposed to the financial market risks, primarily changes in foreign currency exchange rates, interest rates and equity investment prices. A portion of these risks is hedged.
Foreign currency risk
Substantially the Company’s sales is denominated in U.S. dollars and over half of its capital expenditures are denominated in currencies other than NT dollars, primarily in U.S. dollars, Japanese yen and Euros. As a result, any significant fluctuations to its disadvantage in the exchanges rate of NT dollar against such currencies, in particular a weakening of U.S. dollar against NT dollars, would have an adverse impact on
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