Microsoft 2013 Annual Report Download - page 60

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NOTE 6 — FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present the fair value of our financial instruments that are measured at fair value on a recurring basis:
(In millions)
Level 1
Level 2
Level 3
Gross
Fair
Value
Netting (a)
Net Fair
Value
June 30, 2013
Assets
Mutual funds
$ 868
$ 0
$ 0
$ 868
$ 0
$ 868
Commercial paper
0
603
0
603
0
603
Certificates of deposit
0
994
0
994
0
994
U.S. government and agency
securities
62,237
2,664
0
64,901
0
64,901
Foreign government bonds
9
851
0
860
0
860
Mortgage-backed securities
0
1,311
0
1,311
0
1,311
Corporate notes and bonds
0
4,915
19
4,934
0
4,934
Municipal securities
0
385
0
385
0
385
Common and preferred stock
8,470
717
5
9,192
0
9,192
Derivatives
12
489
0
501
(81)
420
Total
$ 71,596
$ 12,929
$ 24
$ 84,549
$ (81)
$ 84,468
Liabilities
Derivatives and other
$ 14
$ 121
$ 0
$ 135
$ (80)
$ 55
(In millions)
Level 1
Level 2
Level 3
Gross
Fair
Value
Netting
(a)
Net Fair
Value
June 30, 2012
Assets
Mutual funds
$ 820
$ 0
$ 0
$ 820
$ 0
$ 820
Commercial paper
0
96
0
96
0
96
Certificates of deposit
0
744
0
744
0
744
U.S. government and agency
securities
42,291 5,019 0 47,310 0 47,310
Foreign government bonds
31
1,703
0
1,734
0
1,734
Mortgage-backed securities
0
1,892
0
1,892
0
1,892
Corporate notes and bonds
0
7,839
9
7,848
0
7,848
Municipal securities
0
416
0
416
0
416
Common and preferred stock
7,539
877
5
8,421
0
8,421
Derivatives
16
467
0
483
(141)
342
Total
$ 50,697
$ 19,053
$ 14
$ 69,764
$ (141)
$ 69,623
Liabilities
Derivatives and other
$ 10
$ 145
$ 0
$ 155
$ (139)
$ 16
(a) These amounts represent the impact of netting derivative assets and derivative liabilities when a legally enforceable
master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit
risk.
The changes in our Level 3 financial instruments that are measured at fair value on a recurring basis were immaterial
during the periods presented.