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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
Information regarding the fair value of derivatives on a gross basis is as follows:
Balance
Sheet
Caption
March 31, 2015 March 31, 2014
Fair Value of
Derivative U.S.
Dollar
Notional
Fair Value of
Derivative U.S
Dollar
Notional(In millions) Asset Liability Asset Liability
Derivatives designated for hedge
accounting
Foreign exchange contracts
(current)
Prepaid expenses
and other $ 14 $— $ 76 $ 4 $— $ 64
Foreign exchange contracts
(non-current) Other assets 53 — 323 27 — 399
Total $ 67 $ — $ 31 $—
Derivatives not designated for
hedge accounting
Foreign exchange contracts
(current)
Prepaid expenses
and other $ 7 $— $ 493 $ 2 $— $255
Foreign exchange contracts
(current)
Other accrued
liabilities — 79 1,262 — 13 836
Interest rate swap contracts
(current)
Other accrued
liabilities — — — — 1 96
Total $ 7 $ 79 $ 2 $ 14
Refer to Financial Note 20, “Fair Value Measurements,” for more information on these recurring fair value
measurements.
20. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The analysis of fair value is conducted
by our accounting and finance personnel who organizationally report to the Chief Financial Officer. There is a
three-level hierarchy that prioritizes the inputs used in determining fair value by their reliability and preferred
use, as follows:
Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities.
Level 2—Valuations based on quoted prices in active markets for similar assets and liabilities, quoted prices
for identical or similar assets or liabilities in inactive markets, or other inputs that are observable
or can be corroborated by observable market data.
Level 3—Valuations based on inputs that are both significant to the fair value measurement and
unobservable.
At March 31, 2015 and 2014, the carrying amounts of cash, certain cash equivalents, restricted cash,
receivables, drafts and accounts payable, short-term borrowings and other current liabilities approximated their
estimated fair values because of the short maturity of these financial instruments.
Our long-term debt and other financing arrangements are carried at amortized cost. The carrying amounts
and estimated fair values of these liabilities were $9.7 billion and $10.4 billion at March 31, 2015 and $10.3
107