Dell 2010 Annual Report Download - page 73

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Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — FAIR VALUE MEASUREMENTS
The following table presents Dell's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of January 28,
2011, and January 29, 2010:
January 28, 2011 January 29, 2010
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Quoted Quoted
Prices Prices
in Active Significant in Active Significant
Markets for Other Significant Markets for Other Significant
Identical Observable Unobservable Identical Observable Unobservable
Assets Inputs Inputs Assets Inputs Inputs
(in millions)
Assets:
Cash equivalents:
Money market funds $ 6,261 $ - $ - $ 6,261 $ 7,729 $ - $ - $ 7,729
Commercial Paper - 2,945 - 2,945 - 197 - 197
U.S. government and agencies - 1,699 - 1,699 - - - -
Debt Securities:
U.S. government and agencies - 79 - 79 - 66 - 66
U.S. corporate - 464 32 496 - 553 30 583
International corporate - 457 - 457 - 391 - 391
State and municipal governments - - - - - 2 - 2
Equity and other securities - 109 - 109 - 90 - 90
Retained interest - - - - - - 151 151
Derivative instruments - 27 - 27 - 96 - 96
Total assets $ 6,261 $ 5,780 $ 32 $ 12,073 $ 7,729 $ 1,395 $ 181 $ 9,305
Liabilities:
Derivative instruments $ - $ 28 $ - $ 28 $ - $ 12 $ - $ 12
Total liabilities $ - $ 28 $ - $ 28 $ - $ 12 $ - $ 12
The following section describes the valuation methodologies Dell uses to measure financial instruments at fair value:
Cash Equivalents — The majority of Dell's cash equivalents in the above table consists of money market funds, commercial paper,
including corporate and asset-backed commercial paper, and U.S. government and agencies, all with original maturities of less than
ninety days and are valued at fair value which approximates cost. The valuations of these securities are based on quoted prices in active
markets for identical assets, when available, or pricing models whereby all significant inputs are observable or can be derived from or
corroborated by observable market data. When quoted prices are not available, Dell utilizes a pricing service to assist in obtaining fair
value pricing. Dell conducts reviews on a quarterly basis to verify pricing, assess liquidity, and determine if significant inputs have
changed that would impact the fair value hierarchy disclosure.
Debt Securities — The majority of Dell's debt securities consists of various fixed income securities such as U.S. government and
agencies, U.S. and international corporate, and state and municipal bonds. Dell utilizes a pricing service to assist management in
measuring fair value pricing for the majority of this investment portfolio. Valuation is based on pricing models whereby all significant
inputs, including benchmark yields, reported trades, broker-dealer quotes, issue spreads, benchmark securities, bids, offers and other
market related data, are observable or can be derived from or corroborated by observable market data for substantially the full term of the
asset. Inputs are documented in accordance with the fair value measurements hierarchy. Dell conducts reviews on a quarterly basis to
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