Electronic Arts 2016 Annual Report Download - page 147

Annual Report
(2) FAIR VALUE MEASUREMENTS
There are various valuation techniques used to estimate fair value, the primary one being the price that would be
received from selling an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When determining fair value, we consider the principal or most advantageous market in
which we would transact and consider assumptions that market participants would use when pricing the asset or
liability. We measure certain financial and nonfinancial assets and liabilities at fair value on a recurring and
nonrecurring basis.
Fair Value Hierarchy
The three levels of inputs that may be used to measure fair value are as follows:
•Level 1. Quoted prices in active markets for identical assets or liabilities.
•Level 2. Observable inputs other than quoted prices included within Level 1, such as quoted prices for
similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions
(less active markets), or model-derived valuations in which all significant inputs are observable or can be
derived principally from or corroborated with observable market data for substantially the full term of the
assets or liabilities.
•Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the
fair value of assets or liabilities.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of March 31, 2016 and 2015, our assets and liabilities that were measured and recorded at fair value on a
recurring basis were as follows (in millions):
Fair Value Measurements at Reporting
Date Using
As of
March 31,
2016
Quoted
Prices in
Active
Markets for
Identical
Financial
Instruments
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
(Level 1) (Level 2) (Level 3) Balance Sheet Classification
Assets
Bank and time deposits ................ $ 345 $345 $ — $— Cash equivalents
Money market funds .................. 143 143 — — Cash equivalents
Available-for-sale securities:
Corporate bonds .................... 745 — 745 — Short-term investments and
cash equivalents
U.S. Treasury securities .............. 407 407 — — Short-term investments and
cash equivalents
U.S. agency securities ............... 170 — 170 — Short-term investments and
cash equivalents
Commercial paper .................. 81 — 81 — Short-term investments and
cash equivalents
Foreign currency derivatives ............ 16 — 16 — Other current assets and
other assets
Deferred compensation plan assets(a) ...... 8 8 — — Other assets
Total assets at fair value .............. $1,915 $903 $1,012 $—
Liabilities
Foreign currency derivatives ............ 10 — 10 — Accrued and other current
liabilities and other
liabilities
Deferred compensation plan liabilities(a) . . . 9 9 — — Other liabilities
Total liabilities at fair value ........... $ 19 $ 9 $ 10 $—
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