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QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Activity between Levels of the Fair Value Hierarchy. There were no significant transfers between Level 1 and Level 2 during fiscal 2014
or
2013 . When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the
unobservable inputs to the overall fair value measurement. The following table includes the activity for marketable securities and other liabilities
classified within Level 3 of the valuation hierarchy (in millions):
The Company recognizes transfers into and out of levels within the fair value hierarchy at the end of the fiscal month in which the actual
event or change in circumstances that caused the transfer occurs. Transfers out of Level 3 during fiscal 2014 primarily consisted of debt
securities with significant upgrades in credit ratings. Transfers into Level 3 in fiscal 2013 primarily consisted of debt securities with significant
inputs that became unobservable as a result of an increased likelihood of a shortfall in contractual cash flows or a significant downgrade in credit
ratings.
Nonrecurring Fair Value Measurements. The Company measures certain assets at fair value on a nonrecurring basis. These assets include
cost and equity method investments when they are deemed to be other-than-temporarily impaired, assets acquired and liabilities assumed in an
acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they
are held for sale or determined to be impaired. During fiscal
F- 29
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents
$
3,603
$
3,884
$
—
$
7,487
Marketable securities
U.S. Treasury securities and government-related securities
715
840
—
1,555
Corporate bonds and notes
—
14,481
—
14,481
Mortgage- and asset-backed securities
—
1,309
186
1,495
Auction rate securities
—
—
83
83
Common and preferred stock
1,056
741
—
1,797
Equity funds
541
—
—
541
Debt funds
813
3,350
—
4,163
Total marketable securities
3,125
20,721
269
24,115
Derivative instruments
1
4
—
5
Other investments
262
—
—
262
Total assets measured at fair value
$
6,991
$
24,609
$
269
$
31,869
Liabilities
Derivative instruments
$
—
$
1
$
—
$
1
Other liabilities
261
—
—
261
Total liabilities measured at fair value
$
261
$
1
$
—
$
262
2014
2013
Auction Rate
Securities
Mortgage- and
Asset-Backed
Securities
Auction Rate
Securities
Mortgage- and
Asset-Backed
Securities
Beginning balance of Level 3
$
83
$
239
$
118
$
203
Total realized and unrealized gains (losses):
Included in investment income, net
—
11
—
8
Included in other comprehensive income
—
(
3
)
1
(6
)
Purchases
—
107
—
163
Sales
—
(
126
)
—
(
70
)
Settlements
—
(
40
)
(36
)
(77
)
Transfers (out of) into Level 3
—
(
2
)
—
18
Ending balance of Level 3
$
83
$
186
$
83
$
239