Medtronic 2010 Annual Report Download - page 76

72 Medtronic, Inc.
Notes to Consolidated Financial Statements
(continued)
to the fair value measurement. The hierarchy is broken down into
three levels defined as follows:
• Level 1—Inputs are quoted prices in active markets for
identical assets or liabilities.
• Level 2—Inputs include quoted prices for similar assets or
liabilities in active markets, quoted prices for identical or
similar assets or liabilities in markets that are not active and
inputs (other than quoted prices) that are observable for the
asset or liability, either directly or indirectly.
• Level 3—Inputs are unobservable inputs for the asset
or liability.
See the section below titled Valuation Techniques for further
discussion of how the Company determines fair value for
investments.
Assets and Liabilities That Are Measured at Fair Value on a Recurring
Basis The authoritative guidance is principally applied to financial
assets and liabilities such as marketable equity securities and debt
securities that are classified and accounted for as trading,
available-for-sale and derivative instruments. Derivatives include
cash flow hedges, freestanding derivative forward contracts, net
investment hedges and interest rate swaps. These items were
previously and will continue to be marked-to-market at each
reporting period; however, the definition of fair value is now
applied using the new authoritative guidance for fair value
measurements. The information in the following paragraphs and
tables primarily addresses matters relative to these financial
assets and liabilities. Separately, there were no material fair value
measurements with respect to nonfinancial assets or liabilities
that are recognized or disclosed at fair value in the Company’s
financial statements on a recurring basis subsequent to the
effective date of this authoritative guidance.
The following tables provide information by level for assets and
liabilities that are measured at fair value on a recurring basis.
Fair Value at
Fair Value Measurements
Using Inputs Considered as
(in millions) April 30, 2010 Level 1 Level 2 Level 3
Assets:
Corporate debt
securities $2,134 $ — $2,118 $ 16
Auction rate securities 142 — — 142
Mortgage backed
securities 717 — 678 39
U.S. government and
agency securities 2,753 782 1,971 —
Foreign government
and agency securities 119 — 119 —
Certificates of deposit 256 — 256 —
Other asset backed
securities 313 — 297 16
Marketable equity
securities 11 — —
Derivative assets 296 265 31 —
Exchange-traded funds 30 30 — —
Total assets $6,761 $1,078 $5,470 $213
Liabilities:
Derivative liabilities $ 47 $ 47 $ — $ —
Total liabilities $ 47 $ 47 $ — $ —
Fair Value at
Fair Value Measurements
Using Inputs Considered as
(in millions) April 24, 2009 Level 1 Level 2 Level 3
Assets:
Corporate debt
securities $ 805 $ 8 $ 771 $ 26
Auction rate securities 119 — — 119
Mortgage backed
securities 746 — 709 37
U.S. government and
agency securities 684 174 510 —
Foreign government
and agency securities 13 — 13 —
Certificates of deposit 2 — 2 —
Other asset backed
securities 278 — 255 23
Marketable equity
securities 12 12 — —
Derivative assets 436 436 — —
Total assets $ 3,095 $630 $2,260 $205
Liabilities:
Derivative liabilities $ 31 $ 31 $ — $ —
Total liabilities $ 31 $ 31 $ — $ —