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liabilitieswithintheCompany’sconsolidatedbalancesheetonagrossbasisevenwhenderivativetransactionsaresubjecttomaster
nettingarrangementsandmayotherwisequalifyfornetpresentation.
Fairvaluemeasurements:3MfollowsASC820,FairValueMeasurementsandDisclosures,withrespecttoassetsandliabilities
thataremeasuredatfairvalueonarecurringbasisandnonrecurringbasis.Underthestandard,fairvalueisdefinedastheexitprice,
ortheamountthatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarket
participantsasofthemeasurementdate.Thestandardalsoestablishesahierarchyforinputsusedinmeasuringfairvaluethat
maximizestheuseofobservableinputsandminimizestheuseofunobservableinputsbyrequiringthatthemostobservableinputsbe
usedwhenavailable.Observableinputsareinputsmarketparticipantswoulduseinvaluingtheassetorliabilitydevelopedbasedon
marketdataobtainedfromsourcesindependentoftheCompany.UnobservableinputsareinputsthatreflecttheCompany’s
assumptionsaboutthefactorsmarketparticipantswoulduseinvaluingtheassetorliabilitydevelopedbaseduponthebest
informationavailableinthecircumstances.Thehierarchyisbrokendownintothreelevels.Level1inputsarequotedprices
(unadjusted)inactivemarketsforidenticalassetsorliabilities.Level2inputsincludequotedpricesforsimilarassetsorliabilitiesin
activemarkets,quotedpricesforidenticalorsimilarassetsorliabilitiesinmarketsthatarenotactive,andinputs(otherthanquoted
prices)thatareobservablefortheassetorliability,eitherdirectlyorindirectly.Level3inputsareunobservableinputsfortheassetor
liability.Categorizationwithinthevaluationhierarchyisbaseduponthelowestlevelofinputthatissignificanttothefairvalue
measurement.
Acquisitions:TheCompanyaccountsforbusinessacquisitionsinaccordancewithASC805,BusinessCombinations.Thisstandard
requirestheacquiringentityinabusinesscombinationtorecognizeall(andonly)theassetsacquiredandliabilitiesassumedinthe
transactionandestablishestheacquisition-datefairvalueasthemeasurementobjectiveforallassetsacquiredandliabilitiesassumed
inabusinesscombination.Certainprovisionsofthisstandardprescribe,amongotherthings,thedeterminationofacquisition-date
fairvalueofconsiderationpaidinabusinesscombination(includingcontingentconsideration)andtheexclusionoftransactionand
acquisition-relatedrestructuringcostsfromacquisitionaccounting.
NewAccountingPronouncements
InApril2014,theFinancialAccountingStandardsBoard(FASB)issuedASUNo.2014-08,ReportingDiscontinuedOperationsand
DisclosuresofDisposalsofComponentsofanEntity,whichchangedthecriteriafordeterminingwhichdisposalscanbepresented
asdiscontinuedoperationsandmodifiedrelateddisclosurerequirements.Thisstandardhastheimpactofreducingthefrequencyof
disposalsreportedasdiscontinuedoperations,byrequiringsuchadisposaltorepresentastrategicshiftthathasorwillhaveamajor
effectonanentity’soperationsandfinancialresults.However,existingprovisionsthatprohibitedanentityfromreportinga
discontinuedoperationifithadcertaincontinuingcashflowsorinvolvementwiththecomponentafterdisposalwereeliminatedby
thisstandard.TheASUalsoexpandsthedisclosuresfordiscontinuedoperationsandrequiresnewdisclosuresrelatedtoindividually
significantdisposalsthatdonotqualifyasdiscontinuedoperations.For3M,thisASUwaseffectiveprospectivelybeginning
January1,2015.ThisASUwasappliedtothe2015divestitureinformationdiscussedinNote2andhadnomaterialimpacton
consolidatedresultsofoperationsandfinancialcondition.
InMay2014,theFASBissuedASUNo.2014-09,RevenuefromContractswithCustomers,andinAugust2015issuedASUNo.
2015-14,whichamendedASUNo.2014-09astoeffectivedate.TheASU,asamended,providesasinglecomprehensivemodelto
beusedintheaccountingforrevenuearisingfromcontractswithcustomersandsupersedesmostcurrentrevenuerecognition
guidance,includingindustry-specificguidance.Thestandard’sstatedcoreprincipleisthatanentityshouldrecognizerevenueto
depictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpects
tobeentitledinexchangeforthosegoodsorservices.ToachievethiscoreprincipletheASUincludesprovisionswithinafivestep
modelthatincludesidentifyingthecontractwithacustomer,identifyingtheperformanceobligationsinthecontract,determiningthe
transactionprice,allocatingthetransactionpricetotheperformanceobligations,andrecognizingrevenuewhen(oras)anentity
satisfiesaperformanceobligation.Thestandardalsospecifiestheaccountingforsomecoststoobtainorfulfillacontractwitha
customerandrequiresexpandeddisclosuresaboutrevenuerecognition.Thestandardprovidesforeitherfullretrospectiveadoption
oramodifiedretrospectiveadoptionbywhichitisappliedonlytothemostcurrentperiodpresented.For3M,theASU,as
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