Note 14 - Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

14.      Fair Value Measurements

Fair value standards under U.S. GAAP define fair value, establish a framework for measuring fair value in applying generally accepted accounting principles, and require disclosures about fair value measurements.  The standards also identify two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable.  Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions.  Once inputs have been characterized, the inputs are prioritized into one of three broad levels (provided in the table below) used to measure fair value.  Fair value standards apply whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement and require the use of observable market data when available.

The following tables provide fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis (in millions):

			Fair value measurements at reporting date using
	March 31, 2016		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Other current assets (1)	$	336		$	336
Non-current assets:
Other assets (1)(2)	$	540		$	288	$	252
Current liabilities:
Other accrued liabilities (1)	$	112		$	112
Non-current liabilities:
Other liabilities (1)(3)	$	620		$	612	$	8

(1) Derivative assets and liabilities include foreign exchange forward and zero-cost collar contracts, and interest rate swaps which are measured using observable quoted prices for similar assets and liabilities.

(2) Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets which are measured by applying an option pricing model using projected future revenue.

(3) Other liabilities include Level 3 contingent consideration payables which are measured by applying an option pricing model using projected future revenues.

			Fair value measurements at reporting date using
	December 31, 2015		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Short-term investments	$	100	$	100
Other current assets (1)	$	522			$	522
Non-current assets:
Other assets (1)(2)	$	752			$	506	$	246
Current liabilities:
Other accrued liabilities (1)	$	55			$	55
Non-current liabilities:
Other liabilities (1)(3)	$	98			$	88	$	10

(1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities.

(2) Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenues.

(3) Other liabilities include Level 3 contingent consideration payables which are measured by applying an option pricing model using projected future revenues.

As a result of the acquisition of Samsung Corning Precision Materials in January 2014, the Company has contingent consideration that was measured using unobservable (Level 3) inputs.  Changes in the fair value of the contingent consideration in future periods are valued using an option pricing model and are recorded in Corning’s results in the period of the change.  As of March 31, 2016 and December 31, 2015, the fair value of the potential receipt of the contingent consideration in 2018 was $252 million and $246 million, respectively.

As a result of the acquisitions of iBwave Solutions Inc. and the fiber-optics business of Samsung Electronics Co., Ltd., the Company has contingent consideration that was measured using unobservable (Level 3) inputs.  As of March 31, 2016, the fair value of the contingent consideration payable is $8 million.

There were no significant financial assets and liabilities measured on a nonrecurring basis during the quarter ended March 31, 2016.