Cisco 2015 Annual Report Download - page 106

9. Fair Value
(a) Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis as of July 25, 2015 and July 26, 2014 were as follows (in
millions):
JULY 25, 2015
FAIR VALUE MEASUREMENTS
JULY 26, 2014
FAIR VALUE MEASUREMENTS
Level 1 Level 2 Level 3
Total
Balance Level 1 Level 2 Level 3
Total
Balance
Assets:
Cash equivalents:
Money market funds ...................... $ 5,336 $ — $ — $ 5,336 $4,935 $ — $ — $ 4,935
Corporate debt securities ................. —14—14————
Available-for-sale investments:
U.S. government securities ............... — 29,939 — 29,939 — 31,734 — 31,734
U.S. government agency securities ........ — 3,663 — 3,663 — 1,063 — 1,063
Non-U.S. government and agency
securities ................................. — 1,128 — 1,128 — 861 — 861
Corporate debt securities ................. — 15,783 — 15,783 — 9,159 — 9,159
U.S. agency mortgage-backed securities . . — 1,461 — 1,461 — 579 — 579
Publicly traded equity securities .......... 1,565 — — 1,565 1,952 — — 1,952
Derivative assets .............................. — 214 4 218 — 158 2 160
Total ................................ $ 6,901 $52,202 $ 4 $59,107 $6,887 $43,554 $ 2 $50,443
Liabilities:
Derivative liabilities ...................... $—$12$—$12$—$ 67$—$ 67
Total ................................ $—$12$—$12$—$ 67$—$ 67
Level 1 publicly traded equity securities are determined by using quoted prices in active markets for identical assets. Level 2
fixed income securities are priced using quoted market prices for similar instruments or nonbinding market prices that are
corroborated by observable market data. The Company uses inputs such as actual trade data, benchmark yields, broker/dealer
quotes, and other similar data, which are obtained from quoted market prices, independent pricing vendors, or other sources, to
determine the ultimate fair value of these assets and liabilities. The Company uses such pricing data as the primary input to make
its assessments and determinations as to the ultimate valuation of its investment portfolio and has not made, during the periods
presented, any material adjustments to such inputs. The Company is ultimately responsible for the financial statements and
underlying estimates. The Company’s derivative instruments are primarily classified as Level 2, as they are not actively traded
and are valued using pricing models that use observable market inputs. The Company did not have any transfers between Level 1
and Level 2 fair value measurements during the periods presented.
Level 3 assets include certain derivative instruments, the values of which are determined based on discounted cash flow models
using inputs that the Company could not corroborate with market data.
(b) Assets Measured at Fair Value on a Nonrecurring Basis
The following table presents the Company’s assets that were measured at fair value on a nonrecurring basis during the indicated
periods and the related recognized gains and losses for the periods indicated (in millions):
TOTAL GAINS (LOSSES) FOR THE YEARS ENDED
July 25, 2015 July 26, 2014 July 27, 2013
Investments in privately held companies (impaired) ......................... $ (38) $ (21) $ (31)
Purchased intangible assets (impaired) ...................................... (175) ——
Property held for sale—land and buildings .................................. —— (1)
Gains (losses) on assets no longer held at end of fiscal year .................. (8) (2) 75
Total gains (losses) for nonrecurring measurements ....................... $ (221) $ (23) $ 43
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