Charles Schwab 2010 Annual Report Download - page 91
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THE CHARLES SCHWAB CORPORATION
Notes to Consolidated Financial Statements
(Tabular Amounts in Millions, Except Per Share Data, Option Price Amounts, Ratios, or as Noted)
Assets and Liabilities Recorded at Fair Value
The Company’s assets recorded at fair value include certain cash equivalents, investments segregated and on deposit for regulatory
purposes, other securities owned, and securities available for sale. When available, the Company uses quoted prices in active markets
to measure the fair value of assets. When quoted prices do not exist, the Company uses prices obtained from independent third-party
pricing services to measure the fair value of assets. The Company validates prices received from the pricing service using various
methods including comparison to prices received from additional pricing services, comparison to quoted market prices, where
available, comparison to internal valuation models, and review of other relevant market data. The Company does not adjust the prices
received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in
a material difference in the recorded amounts. At December 31, 2010 and 2009, the Company did not adjust prices received from
independent third-party pricing services. Liabilities recorded at fair value are not material, and therefore are not included in the
following tables.
The following tables present the fair value hierarchy for assets measured at fair value:
-72 -
December 31, 2010
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
Significant
Other Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Balance a
t
Fair Value
Cash e
q
uivalents:
Mone
y
market funds
$ 988
$
—
$
—
$988
Commercial
p
a
p
er
—
242
—
242
Total cash e
q
uivalents
988
242
—
1,230
Investments segregated and on deposit for regulatory
p
ur
p
oses:
U.S. Government securities
—
3,19
0
—
3,190
Certificates of de
p
osit
—
2,201
—
2,201
Cor
p
orate debt securities
—
1,704
—
1,704
Total investments segregated and on deposit
for re
g
ulator
y
p
ur
p
oses
—
7,095
—
7,095
Other securities owned:
Schwab Funds mone
y
market funds
172
—
—
172
E
q
uit
y
and bond mutual funds
99
—
—
99
State and munici
p
al debt obli
g
ations
—
47
—
47
Equity, U.S. Government and corporate debt, and
other securities
1
18
—
19
Total other securities owned
272
65
—
337
Securities available for sale:
U.S. agency residential mortgage-backed
securities
—
13,098
—
13,098
Non-agency residential mortgage-backed
securities
—
1,47
0
—
1,470
U.S. a
g
enc
y
notes
—
2,78
0
—
2,780
Asset-backed securities
—
2,502
—
2,502
Cor
p
orate debt securities
—
2,268
—
2,268
Certificates of de
p
osit
—
1,875
—
1,875
Total securities available for sale
—
23,993
—
23,993
Total
$ 1,260
$ 31,395
$
—
$ 32,655
®