Boeing 2015 Annual Report Download - page 119

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103
Money market funds, available-for-sale debt investments and equity securities are valued using a market
approach based on the quoted market prices or broker/dealer quotes of identical or comparable
instruments.
Derivatives include foreign currency, commodity and interest rate contracts. Our foreign currency forward
contracts are valued using an income approach based on the present value of the forward rate less the
contract rate multiplied by the notional amount. Commodity derivatives are valued using an income
approach based on the present value of the commodity index prices less the contract rate multiplied by
the notional amount. The fair value of our interest rate swaps is derived from a discounted cash flow
analysis based on the terms of the contract and the interest rate curve.
Certain assets have been measured at fair value on a nonrecurring basis using significant unobservable
inputs (Level 3). The following table presents the nonrecurring losses recognized for the years ended
December 31 due to long-lived asset impairment, and the fair value and asset classification of the related
assets as of the impairment date:
2015 2014
Fair
Value
Total
Losses
Fair
Value
Total
Losses
Operating lease equipment $270 ($159) $187 ($170)
Property, plant and equipment 8 (6) 19 (15)
Other assets and Acquired intangible assets (17)
Total $278 ($165) $206 ($202)
The fair value of the impaired operating lease equipment is derived by calculating a median collateral value
from a consistent group of third party aircraft value publications. The values provided by the third party
aircraft publications are derived from their knowledge of market trades and other market factors.
Management reviews the publications quarterly to assess the continued appropriateness and consistency
with market trends. Under certain circumstances, we adjust values based on the attributes and condition
of the specific aircraft or equipment, usually when the features or use of the aircraft vary significantly from
the more generic aircraft attributes covered by third party publications, or on the expected net sales price
for the aircraft. Property, plant and equipment, Other assets and Acquired intangible assets were primarily
valued using an income approach based on the discounted cash flows associated with the underlying
assets.
For Level 3 assets that were measured at fair value on a nonrecurring basis during the year ended December
31, 2015, the following table presents the fair value of those assets as of the measurement date, valuation
techniques and related unobservable inputs of those assets.
Fair
Value
Valuation
Technique(s)
Unobservable
Input
Range
Median or Average
Operating lease equipment $270 Market
approach
Aircraft value
publications
$226 - $394(1)
Median $343
Aircraft condition
adjustments
($112) - $39(2)
Net ($73)
(1) The range represents the sum of the highest and lowest values for all aircraft subject to fair value
measurement, according to the third party aircraft valuation publications that we use in our valuation
process.
(2) The negative amount represents the sum, for all aircraft subject to fair value measurement, of all
downward adjustments based on consideration of individual aircraft attributes and condition. The
positive amount represents the sum of all such upward adjustments.