Dow Chemical 2009 Annual Report Download - page 146

Table of Contents
NOTE K – FAIR VALUE MEASUREMENTS
The following tables summarize the bases used to measure certain assets and liabilities at fair value on a recurring basis in the consolidated balance sheets at
December 31, 2009 and 2008:
Basis of Fair Value Measurements on a
Recurring Basis
at December 31, 2009
In millions
Quoted Prices
in Active
Markets for
Identical Items
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Counterparty
and Cash
Collateral
Netting (1) Total
Assets at fair value:
Equity securities (2) $ 483 $ 34 - $ 517
Debt securities (2) - 1,619 - 1,619
Derivatives relating to: (3)
Foreign currency - 129 $ (48) 81
Commodities 28 4 (27) 5
Total assets at fair value $ 511 $ 1,786 $ (75) $ 2,222
Liabilities at fair value:
Derivatives relating to: (3)
Foreign currency - $ 68 $ (48) $ 20
Commodities $ 24 18 (24) 18
Total liabilities at fair value $ 24 $ 86 $ (72) $ 38
Basis of Fair Value Measurements on a
Recurring Basis
at December 31, 2008
In millions
Quoted Prices
in Active
Markets for
Identical Items
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Counterparty
and Cash
Collateral
Netting (1) Total
Assets at fair value:
Equity securities (2) $ 337 $ 21 - $ 358
Debt securities (2) - 1,495 - 1,495
Derivatives relating to: (3)
Foreign currency - 312 $ (190) 122
Commodities - 131 (66) 65
Total assets at fair value $ 337 $ 1,959 $ (256) $ 2,040
Liabilities at fair value:
Derivatives relating to: (3)
Foreign currency - $ 353 $ (190) $ 163
Commodities $ 49 296 (125) 220
Total liabilities at fair value $ 49 $ 649 $ (315) $ 383
(1) Cash collateral is classified as “Accounts and notes receivable – Other” in the consolidated balance sheets. Amounts represent the
estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company
and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
(2) The Company’s investments in equity and debt securities are primarily classified as available-for-sale and are included in “Other
investments” in the consolidated balance sheets.
(3) See Note J for the classification of derivatives in the consolidated balance sheets.
For assets and liabilities classified as Level 1 (measured using quoted prices in active markets), the total fair value is either the price of the most recent
trade at the time of the market close or the official close price, as defined by the exchange in which the asset is most actively traded on the last trading day of
the period, multiplied by the number of units held without consideration of transaction costs.
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