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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 the
Company’s debt instruments and 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 AOCI 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.
Note 2 – Financial Instruments
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash and available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized
losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term marketable
securities as of September 26, 2015 and September 27, 2014 (in millions):
2015
Adjusted
Cost Unrealized
Gains Unrealized
Losses Fair
Value
Cash and
Cash
Equivalents
Short-Term
Marketable
Securities
Long-Term
Marketable
Securities
Cash $ 11,389 $ 0 $ 0 $ 11,389 $ 11,389 $ 0 $ 0
Level 1:
Money market funds 1,798 0 0 1,798 1,798 0 0
Mutual funds 1,772 0 (144) 1,628 0 1,628 0
Subtotal 3,570 0 (144) 3,426 1,798 1,628 0
Level 2:
U.S. Treasury securities 34,902 181 (1) 35,082 0 3,498 31,584
U.S. agency securities 5,864 14 0 5,878 841 767 4,270
Non-U.S. government securities 6,356 45 (167) 6,234 43 135 6,056
Certificates of deposit and time deposits 4,347 0 0 4,347 2,065 1,405 877
Commercial paper 6,016 0 0 6,016 4,981 1,035 0
Corporate securities 116,908 242 (985) 116,165 3 11,948 104,214
Municipal securities 947 5 0 952 0 48 904
Mortgage- and asset-backed securities 16,121 87 (31) 16,177 0 17 16,160
Subtotal 191,461 574 (1,184) 190,851 7,933 18,853 164,065
Total $ 206,420 $ 574 $ (1,328) $ 205,666 $ 21,120 $ 20,481 $ 164,065
Apple Inc. | 2015 Form 10-K | 49