Apple 2009 Annual Report Download - page 75

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Table of Contents
The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the
categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1
– Quoted prices in active markets for identical assets or liabilities.
Level 2
–
Observable inputs other than quoted prices in active markets for identical 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 for substantially the
full term of the assets or liabilities.
Level 3
– Inputs that are generally unobservable and typically reflect management’
s estimates of assumptions that market participants would use
in pricing the asset or liability.
The Company’
s valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were
derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of all other
financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven
valuations using significant inputs derived from or corroborated by observable market data.
Assets/Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the Company’
s assets and liabilities measured at fair value on a recurring basis as of September 26, 2009 (in
millions):
72
September 26, 2009
Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total (a)
Assets:
Money market funds
$
1,608
$
—
$
—
$
1,608
U.S. Treasury securities
—
3,616
—
3,616
U.S. agency securities
—
11,107
—
11,107
Non
-
U.S. government securities
—
321
—
321
Certificates of deposit and time deposits
—
1,714
—
1,714
Commercial paper
—
4,197
—
4,197
Corporate securities
—
9,786
—
9,786
Municipal securities
—
504
—
504
Marketable equity securities
61
—
—
61
Derivative assets
—
37
—
37
Total assets measured at fair value
$
1,669
$
31,282
$
—
$
32,951
Liabilities:
Derivative liabilities
$
—
$
25
$
—
$
25
Total liabilities measured at fair value
$
—
$
25
$
—
$
25
(a)
The total fair value amounts for assets and liabilities also represent the related carrying amounts.