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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In October 2009, the FASB issued new standards for revenue recognition with multiple deliverables. These new standards
impact the determination of when the individual deliverables included in a multiple-element arrangement may be treated as
separate units of accounting. Additionally, these new standards modify the manner in which the transaction consideration is
allocated across the separately identified deliverables by no longer permitting the residual method of allocating arrangement
consideration. These new standards are required to be adopted in the first quarter of 2011; however, early adoption is
permitted. We do not expect these new standards to significantly impact our consolidated financial statements.
In October 2009, the FASB issued new standards for the accounting for certain revenue arrangements that include software
elements. These new standards amend the scope of pre-existing software revenue guidance by removing from the guidance
non-software components of tangible products and certain software components of tangible products. These new standards are
required to be adopted in the first quarter of 2011; however, early adoption is permitted. We do not expect these new standards
to significantly impact our consolidated financial statements.
In January 2010, the FASB issued amended standards that require additional fair value disclosures. These amended standards
require disclosures about inputs and valuation techniques used to measure fair value as well as disclosures about significant
transfers, beginning in the first quarter of 2010. Additionally, these amended standards require presentation of disaggregated
activity within the reconciliation for fair value measurements using significant unobservable inputs (Level 3), beginning in the
first quarter of 2011. We do not expect these new standards to significantly impact our consolidated financial statements.
Note 5: Fair Value
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining fair value, we consider the principal or most
advantageous market in which we would transact, and we consider assumptions that market participants would use when
pricing the asset or liability. Our financial instruments are measured and recorded at fair value, except for equity method
investments, cost method investments, cost method loans receivable, and most of our liabilities.
Fair Value Hierarchy
The three levels of inputs that may be used to measure fair value are as follows:
Level 1.
Quoted prices in active markets for identical assets or liabilities.
Level 2.
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in
markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all
significant inputs are observable or can be derived principally from or corroborated with observable market data for
substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can
be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.
Level 3.
Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets
or liabilities. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were
unable to corroborate with observable market data.
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