HP 2015 Annual Report Download - page 153

Table of Contents
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Short- and Long-Term Debt: HP estimates the fair value of its debt primarily using an expected present value technique, which is based on observable
market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering its
own credit risk. The portion of HP's debt that is hedged is reflected in the Consolidated Balance Sheets as an amount equal to the debt's carrying amount and
a fair value adjustment representing changes in the fair value of the hedged debt obligations arising from movements in benchmark interest rates. The
estimated fair value of HP's short- and long-term debt approximated its carrying amount of $24.7 billion at October 31, 2015. The estimated fair value of HP's
short- and long-term debt was $19.9 billion at October 31, 2014, compared to its carrying amount of $19.5 billion at that date. If measured at fair value in the
Consolidated Balance Sheets, short- and long-term debt would be classified in Level 2 of the fair value hierarchy.
Other Financial Instruments: For the balance of HP's financial instruments, primarily accounts receivable, accounts payable and financial liabilities
included in other accrued liabilities, the carrying amounts approximate fair value due to their short maturities. If measured at fair value in the Consolidated
Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy.
Non-Marketable Equity Investments and Non-Financial Assets: Elements within HP's non-marketable equity investments and non-financial assets, such
as goodwill, intangible assets and property, plant and equipment, are recorded at fair value in the period an impairment charge is recognized. If measured at
fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. In fiscal 2015, HP determined that it
would exit certain data centers. HP conducted an analysis of the respective asset group to determine if the carrying value is greater than the fair value. As a
result of this assessment, HP recorded a $136 million impairment charge to Impairment of data center assets on the Consolidated Statements of Earnings.
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Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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