Best Buy 2015 Annual Report Download - page 80

Table of Contents
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Marketable Equity Securities. Our marketable equity securities were measured at fair value using quoted market prices.
They were classified as Level 1 as they trade in an active market for which closing stock prices are readily available.
Marketable Securities that Fund Deferred Compensation. The assets that fund our deferred compensation consist of
investments in mutual funds. These investments were classified as Level 1 as the shares of these mutual funds trade with
sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.
Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets,
goodwill and other intangible assets, which are remeasured when the derived fair value is below carrying value on our
Consolidated Balance Sheets. For these assets, we do not periodically adjust carrying value to fair value except in the event of
impairment. When we determine that impairment has occurred, the carrying value of the asset is reduced to fair value and the
difference is recorded within operating income in our Consolidated Statements of Earnings.
The following table summarizes the fair value remeasurements for non-restructuring property and equipment impairments and
restructuring activities recorded for fiscal 2015 and fiscal 2014 ($ in millions):
2015 2014
Impairments Remaining Net
Carrying Value(1) Impairments Remaining Net Carrying Value (1)
Continuing operations
Property and equipment (non-restructuring) $ 42 $ 19 $ 101 $ 10
Restructuring activities(2)
Property and equipment 1 — 8 —
Investments — — 16 21
Total $ 43 $ 19 $ 125 $ 31
Discontinued operations(3)
Property and equipment(4) $ 1 $ — $ 221 $ —
Tradename — — 4 —
Total $ 1 $ — $ 225 $ —
(1) Remaining net carrying value approximates fair value.
(2) See Note 4, Restructuring Charges, for additional information.
(3) Property and equipment and tradename impairments associated with discontinued operations are recorded within loss from discontinued operations in our
Consolidated Statements of Earnings.
(4) Includes the $175 million impairment to write down the book value of our investment in Best Buy Europe to fair value. Upon completion of the sale of
Best Buy Europe as described in Note 2, Discontinued Operations, the remaining net carrying values of all assets have been reduced to zero.
All of the fair value remeasurements included in the table above were based on significant unobservable inputs (Level 3). Refer
to Note 1, Summary of Significant Accounting Policies, for further information associated with the goodwill impairments. Fixed
asset fair values were derived using a DCF model to estimate the present value of net cash flows that the asset or asset group is
expected to generate. The key inputs to the DCF model generally included our forecasts of net cash generated from revenue,
expenses and other significant cash outflows, such as capital expenditures, as well as an appropriate discount rate. For the
tradename, fair value was derived using the relief from royalty method, as described in Note 1, Summary of Significant
Accounting Policies. In the case of assets for which the impairment was the result of restructuring activities, no future cash
flows have been assumed as the assets will cease to be used and expected sale values are nominal.
Fair Value of Financial Instruments
Our financial instruments, other than those presented in the disclosures above, include cash, receivables, short-term
investments, other investments, accounts payable, other payables and long-term debt. The fair values of cash, receivables,
short-term investments, accounts payable and other payables approximated carrying values because of the short-term nature of
these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level
1 in the fair value hierarchy. Short-term investments other than those disclosed in the tables above represent time deposits. Fair