Best Buy 2015 Annual Report Download - page 78

Table of Contents
71
3. Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs:
Level 1 — Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement
date.
Level 2 — Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1,
either directly or indirectly, including:
• Quoted prices for similar assets or liabilities in active markets;
• Quoted prices for identical or similar assets in non-active markets;
• Inputs other than quoted prices that are observable for the asset or liability; and
• Inputs that are derived principally from or corroborated by other observable market data.
Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of
significant management judgment. These values are generally determined using pricing models for which the assumptions
utilize management's estimates of market participant assumptions.
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to
measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on
the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a
particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to
the asset or liability. The following tables set forth by level within the fair value hierarchy, our financial assets and liabilities
that were accounted for at fair value on a recurring basis at January 31, 2015, and February 1, 2014, according to the valuation
techniques we used to determine their fair values ($ in millions).
Fair Value Measurements Using Inputs Considered as
Fair Value at January 31, 2015
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Cash and cash equivalents
Money market funds $ 265 $ 265 $ — $ —
Corporate bonds 13 — 13 —
Commercial paper 165 — 165 —
Short-term investments
Corporate bonds 276 — 276 —
Commercial paper 306 — 306 —
Other current assets
Foreign currency derivative instruments 30 — 30 —
Other assets
Interest rate swap derivative instruments 1 — 1 —
Auction rate securities 2 — — 2
Marketable securities that fund deferred compensation 97 97 — —
Assets held for sale
Cash and cash equivalents
Money market funds 16 16 — —