United Healthcare 2010 Annual Report Download - page 77

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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. The Company’s 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 fair value hierarchy is as follows:
Level 1 — Quoted (unadjusted) prices for identical assets/liabilities in active markets.
Level 2 — Other observable inputs, either directly or indirectly, including:
• Quoted prices for similar assets/liabilities in active markets;
• Quoted prices for identical or similar assets in non-active markets (e.g., few transactions, limited
information, non-current prices, high variability over time);
• Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield
curves, volatilities, default rates); and
• Inputs that are derived principally from or corroborated by other observable market data.
Level 3 — Unobservable inputs that cannot be corroborated by observable market data.
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