HP 2009 Annual Report Download - page 121

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 9: Fair Value (Continued)
$39 million were measured using level 3 inputs. HP recorded an impairment charge of $18 million
relating to these investments.
HP reviews the carrying values of the investments when events and circumstances warrant and
considers all available evidence in evaluating when declines in fair value are other-than-temporary
declines. HP determines fair values for investments in public companies using quoted market prices and
records a charge to Interest and other, net when the change in fair values is determined to be an
other-than-temporary change. HP carries equity investments in privately-held companies at cost or at
fair value when HP recognizes an other-than-temporary impairment charge.
HP monitors its investment portfolio for impairment on a periodic basis. In the event that the
carrying value of an investment in debt securities exceeds its fair value and the decline in value is
determined to be an other-than-temporary decline and 1) HP does not intend to sell the debt security,
and 2) when it is not more likely than not that HP will be required to sell the debt security prior to
recovery of its amortized cost basis, HP records an impairment charge to Interest and other, net in the
amount of the credit loss and the balance, if any, to other comprehensive income.
Effective November 1, 2008, HP adopted the accounting standards related to financial instruments
which allows an entity to elect to measure certain financial instruments at fair value on a
contract-by-contract basis. Subsequent to the election, any unrealized gains and losses from the fair
value measurement of the financial instruments will be recognized in earnings. As of October 31, 2009,
HP did not elect such option for any eligible financial instruments.
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