Note 6-Fair Value

Fair value measurements on a recurring basis

The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2011, and April 1, 2011:

	As of September 30, 2011
(Amounts in millions)			Fair Value Hierarchy
	Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	346	$	346	$	-	$	-
Time deposits		78		78		-		-
Short-term investments		6		6		-		-
Derivative assets		2		-		2		-
Total assets	$	432	$	430	$	2	$	-

Liabilities:
Derivative liabilities	$	9	$	-	$	9	$	-
Total liabilities	$	9	$	-	$	9	$	-


	As of April 1, 2011
(Amounts in millions)			Fair Value Hierarchy
	Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	556	$	556	$	-	$	-
Time deposits		241		241		-		-
Short-term investments		10		10		-		-
Derivative assets		9		-		9		-
Total assets	$	816	$	807	$	9	$	-

Liabilities:
Derivative liabilities	$	4	$	-	$	4	$	-
Total liabilities	$	4	$	-	$	4	$	-

Derivative assets and liabilities include foreign currency forward contracts and currency options. The fair value of foreign currency forward contracts represents the estimated amount required to settle the contracts using current market exchange rates, and is based on the period-end foreign currency exchange rates. The fair value of currency options is estimated based on external valuation models that use the original strike price, movement and volatility in foreign currency exchange rates, and length of time to expiration as inputs.

The money market funds and time deposits are included and reported in cash and cash equivalents; short-term investments and derivative assets are in prepaid expenses and other current assets; and the derivative liabilities are in accrued expenses. Gains and losses from changes in the fair value of derivative assets and liabilities are included in earnings and reported in other (income) expense.

Fair value measurements on a non-recurring basis

During the second quarter of fiscal 2012, as a result of annual and interim goodwill impairment assessments, goodwill was impaired with a charge of $2,685 million (see Note 14). The remeasurement of goodwill is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed using Company specific information.

Financial Instruments

The carrying amounts of the Company's financial instruments with short-term maturities are deemed to approximate their market values. The carrying amount of the Company's long-term debt was $2,478 million and $2,409 million and the estimated fair value was $2,619 million and $2,587 million as of September 30, 2011, and April 1, 2011, respectively. The fair value of long-term debt is estimated based on the current interest rates offered to the Company for instruments with similar terms and remaining maturities.

The primary financial instruments which potentially subject the Company to concentrations of credit risk are accounts receivable. The Company's customer base includes Fortune 500 companies, the U.S. federal and other governments and other significant, well-known companies operating in North America, Europe and the Pacific Rim. Credit risk with respect to accounts receivable is minimized because of the nature and diversification of the Company's customer base. Furthermore, the Company continuously reviews its accounts receivables and records provisions for doubtful accounts as needed.

The Company's credit risk is also affected by customers in bankruptcy proceedings; however, because most of these proceedings involve business reorganizations rather than liquidations and the nature of the Company's services are often considered essential to the operational continuity of these customers, the Company is generally able to avoid or mitigate significant adverse financial impact in these cases. As of September 30, 2011, the Company had $15 million of accounts receivable and $8 million of related allowance for doubtful accounts with customers involved in bankruptcy proceedings.