Apple 2011 Annual Report Download - page 56

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Level 3
– Inputs that are generally unobservable and typically reflect management’
s estimate 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.
In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other
items at fair value. The Company has not elected the fair value option for any eligible financial instruments.
Foreign Currency Translation and Remeasurement
The Company translates the assets and liabilities of its non-
U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in
effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the
period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive
income in shareholders’ equity. The Company’
s subsidiaries that use the U.S. dollar as their functional currency remeasure monetary assets and
liabilities at exchange rates in effect at the end of each period, and inventories, property, and nonmonetary assets and liabilities at historical rates.
Gains and losses from these remeasurements were insignificant and have been included in the Company’s results of operations.
Segment Information
The Company reports segment information based on the “management”
approach. The management approach designates the internal reporting
used by management for making decisions and assessing performance as the source of the Company’
s reportable segments. Information about
the Company’s products, major customers and geographic areas on a company-wide basis is also disclosed.
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