Fair Value [Text Block] |
Note 11: Fair Value
For information about our fair value policies, and methods and assumptions used in estimating the fair value of our financial assets and liabilities, see “Accounting Policies" note and "Fair Value" note in Part II, Item 8 of our 2016 Form 10-K.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
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April 1, 2017 |
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December 31, 2016 |
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Fair Value Measured and Recorded at Reporting Date Using |
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Fair Value Measured and Recorded at Reporting Date Using |
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(In Millions) |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
Assets |
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Cash equivalents: |
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Corporate debt |
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$ |
— |
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$ |
650 |
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$ |
— |
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$ |
650 |
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$ |
— |
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$ |
498 |
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$ |
— |
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$ |
498 |
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Financial institution instruments |
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1,075 |
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528 |
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— |
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1,603 |
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1,920 |
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811 |
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— |
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2,731 |
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Government debt |
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— |
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50 |
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— |
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50 |
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— |
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332 |
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— |
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332 |
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Reverse repurchase agreements |
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— |
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1,398 |
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— |
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1,398 |
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— |
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768 |
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— |
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768 |
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Short-term investments: |
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Corporate debt |
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320 |
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1,103 |
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6 |
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1,429 |
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391 |
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941 |
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6 |
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1,338 |
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Financial institution instruments |
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253 |
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1,140 |
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— |
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1,393 |
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119 |
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1,484 |
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— |
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1,603 |
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Government debt |
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100 |
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136 |
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— |
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236 |
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71 |
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213 |
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— |
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284 |
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Trading assets: |
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Asset-backed securities |
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— |
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57 |
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6 |
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63 |
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— |
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80 |
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7 |
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87 |
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Corporate debt |
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2,307 |
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598 |
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— |
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2,905 |
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2,237 |
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610 |
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— |
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2,847 |
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Financial institution instruments |
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873 |
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561 |
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— |
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1,434 |
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973 |
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671 |
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— |
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1,644 |
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Government debt |
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2,313 |
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2,588 |
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— |
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4,901 |
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2,063 |
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1,673 |
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— |
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3,736 |
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Other current assets: |
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Derivative assets |
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— |
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285 |
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— |
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285 |
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— |
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382 |
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— |
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382 |
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Loans receivable |
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— |
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215 |
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— |
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215 |
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— |
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326 |
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— |
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326 |
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Marketable equity securities |
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6,831 |
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— |
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— |
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6,831 |
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6,180 |
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— |
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— |
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6,180 |
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Other long-term investments: |
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Corporate debt |
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1,644 |
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664 |
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6 |
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2,314 |
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1,126 |
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869 |
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6 |
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2,001 |
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Financial institution instruments |
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1,021 |
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689 |
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— |
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1,710 |
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663 |
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1,095 |
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— |
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1,758 |
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Government debt |
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888 |
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237 |
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— |
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1,125 |
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681 |
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276 |
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— |
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957 |
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Other long-term assets: |
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Derivative assets |
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— |
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74 |
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9 |
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83 |
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— |
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31 |
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9 |
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40 |
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Loans receivable |
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— |
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360 |
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— |
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360 |
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— |
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236 |
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— |
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236 |
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Total assets measured and recorded at fair value |
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17,625 |
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11,333 |
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27 |
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28,985 |
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16,424 |
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11,296 |
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28 |
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27,748 |
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Liabilities |
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Other accrued liabilities: |
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Derivative liabilities |
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— |
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304 |
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— |
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304 |
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— |
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371 |
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— |
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371 |
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Other long-term liabilities: |
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Derivative liabilities |
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— |
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193 |
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30 |
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223 |
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— |
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179 |
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33 |
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212 |
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Total liabilities measured and recorded at fair value |
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$ |
— |
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$ |
497 |
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$ |
30 |
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$ |
527 |
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$ |
— |
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$ |
550 |
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$ |
33 |
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$ |
583 |
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During the first three months of 2017, we transferred approximately $736 million of assets from Level 1 to Level 2 of the fair value hierarchy and approximately $762 million of assets from Level 2 to Level 1 ($622 million of assets from Level 1 to Level 2 and $233 million from Level 2 to Level 1 during the first three months of 2016). These transfers were based on changes in market activity for the underlying instruments.
Fair Value Option for Loans Receivable
As of April 1, 2017 and December 31, 2016, the fair value of our loans receivable for which we elected the fair value option did not significantly differ from the contractual principal balance based on the contractual currency.
Assets Measured and Recorded at Fair Value on a Non-Recurring Basis
Our non-marketable equity investments, marketable equity method investments, and non-financial assets, such as intangible assets and property, plant and equipment, are recorded at fair value only if an impairment is recognized.
We classified non-marketable equity investments as Level 3. Impairments recognized on non-marketable equity investments held as of April 1, 2017 were $48 million during the first three months of 2017 (impairments recognized during the first three months of 2016 on non-marketable equity investments held as of April 2, 2016 were insignificant.)
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
The carrying amounts and fair values of financial instruments not recorded at fair value on a recurring basis at the end of each period were as follows:
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April 1, 2017 |
(In Millions) |
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Carrying
Amount
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Fair Value Measured Using |
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Fair Value |
Level 1 |
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Level 2 |
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Level 3 |
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Grants receivable |
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$ |
359 |
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$ |
— |
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$ |
360 |
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$ |
— |
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$ |
360 |
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Loans receivable |
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$ |
265 |
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$ |
— |
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$ |
265 |
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$ |
— |
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$ |
265 |
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Non-marketable cost method investments |
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$ |
3,418 |
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$ |
— |
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$ |
— |
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$ |
4,287 |
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$ |
4,287 |
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Reverse repurchase agreements |
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$ |
250 |
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$ |
— |
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$ |
250 |
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$ |
— |
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$ |
250 |
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Short-term debt |
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$ |
5,043 |
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$ |
3,003 |
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$ |
2,567 |
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$ |
— |
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$ |
5,570 |
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Long-term debt |
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$ |
20,678 |
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$ |
8,618 |
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$ |
13,425 |
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$ |
— |
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$ |
22,043 |
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December 31, 2016 |
(In Millions) |
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Carrying
Amount
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Fair Value Measured Using |
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Fair Value |
Level 1 |
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Level 2 |
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Level 3 |
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Grants receivable |
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$ |
361 |
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$ |
— |
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$ |
362 |
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$ |
— |
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$ |
362 |
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Loans receivable |
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$ |
265 |
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$ |
— |
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$ |
265 |
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$ |
— |
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$ |
265 |
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Non-marketable cost method investments |
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$ |
3,098 |
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$ |
— |
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$ |
— |
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$ |
3,890 |
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$ |
3,890 |
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Reverse repurchase agreements |
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$ |
250 |
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$ |
— |
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$ |
250 |
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$ |
— |
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$ |
250 |
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Short-term debt |
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$ |
4,609 |
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$ |
3,006 |
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$ |
2,114 |
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$ |
— |
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$ |
5,120 |
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Long-term debt |
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$ |
20,649 |
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$ |
12,171 |
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$ |
9,786 |
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$ |
— |
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$ |
21,957 |
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The carrying amount and fair value of short-term debt exclude drafts payable.
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