Intel 2013 Annual Report Download - page 61

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Cash Equivalents
We consider all highly liquid debt investments with original maturities from the date of purchase of approximately
three months or less as cash equivalents. Cash equivalents can include investments such as asset-backed
securities, bank deposits, commercial paper, corporate bonds, government bonds, money market fund deposits,
municipal bonds, and reverse repurchase agreements classified as cash equivalents. See "Note 4: Fair Value" for
the instruments held as cash equivalents.
Trading Assets
Marketable debt instruments are generally designated as trading assets when a market risk is economically hedged
at inception with a related derivative instrument, or when the marketable debt instrument itself is used to
economically hedge foreign exchange rate risk from remeasurement. Investments designated as trading assets are
reported at fair value. The gains or losses of these investments arising from changes in fair value due to interest
rate and currency market fluctuations and credit market volatility, largely offset by losses or gains on the related
derivative instruments and balance sheet remeasurement, are recorded in interest and other, net. We also
designate certain floating-rate securitized financial instruments, primarily asset-backed securities, as trading assets.
Available-for-Sale Investments
We consider all liquid available-for-sale debt instruments with original maturities from the date of purchase of
approximately three months or less to be cash and cash equivalents. Available-for-sale debt instruments with
original maturities at the date of purchase greater than approximately three months and remaining maturities of less
than one year are classified as short-term investments. Available-for-sale debt instruments with remaining maturities
beyond one year are classified as other long-term investments.
Investments that we designate as available-for-sale are reported at fair value, with unrealized gains and losses, net
of tax, recorded in accumulated other comprehensive income (loss), except as noted in the “Other-Than-Temporary
Impairment” section that follows. We determine the cost of the investment sold based on an average cost basis at
the individual security level. Our available-for-sale investments include:
• Marketable debt instruments when the interest rate and foreign currency risks are not hedged at the inception of
the investment or when our criteria for designation as trading assets are not met. We generally hold these debt
instruments to generate a return commensurate with the U.S.-dollar three-month LIBOR. We record the interest
income and realized gains and losses on the sale of these instruments in interest and other, net.
• Marketable equity securities when there is no plan to sell or hedge the investment at the time of original
classification. We acquire these equity investments to promote business and strategic objectives. To the extent
that these investments continue to have strategic value, we typically do not attempt to reduce or eliminate the
equity market risks through hedging activities. We record the realized gains or losses on the sale or exchange
of marketable equity securities in gains (losses) on equity investments, net.
Non-Marketable and Other Equity Investments
Our non-marketable equity and other equity investments are included in other long-term assets. We account for
non-marketable equity and other equity investments for which we do not have control over the investee as:
• Equity method investments when we have the ability to exercise significant influence, but not control, over the
investee. Equity method investments include marketable and non-marketable investments. Our proportionate
share of the income or loss is recognized on a one-quarter lag and is recorded in gains (losses) on equity
investments, net.
• Non-marketable cost method investments when the equity method does not apply. We record the realized gains
or losses on the sale of non-marketable cost method investments in gains (losses) on equity investments, net.
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INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)