Note 14: Fair Value

For information about our fair value policies, and methods and assumptions used in estimating the fair value of our financial assets and liabilities, see “Note 2: Accounting Policies" and "Note 15: Fair Value" in Part II, Item 8 of our 2016 Form 10-K.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis



	September 30, 2017								December 31, 2016
	Fair Value Measured and Recorded at Reporting Date Using								Fair Value Measured and Recorded at Reporting Date Using
(In Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Corporate debt	$	—	$	150	$	—	$	150	$	—	$	498	$	—	$	498
Financial institution instruments ¹	4,146		1,619		—		5,765		1,920		811		—		2,731
Government debt ²	—		100		—		100		—		332		—		332
Reverse repurchase agreements	—		1,599		—		1,599		—		768		—		768
Short-term investments:
Corporate debt	—		750		6		756		—		1,332		6		1,338
Financial institution instruments ¹	—		557		—		557		—		1,603		—		1,603
Government debt ²	—		133		—		133		—		284		—		284
Trading assets:
Asset-backed securities	—		12		—		12		—		87		—		87
Corporate debt	—		2,269		—		2,269		—		2,847		—		2,847
Financial institution instruments ¹	57		990		—		1,047		36		1,608		—		1,644
Government debt ²	31		3,624		—		3,655		32		3,704		—		3,736
Other current assets:
Derivative assets	2		289		—		291		—		382		—		382
Loans receivable	—		88		—		88		—		326		—		326
Marketable equity securities	5,584		475		—		6,059		6,180		—		—		6,180
Other long-term investments:
Corporate debt	—		1,697		5		1,702		—		1,995		6		2,001
Financial institution instruments ¹	—		1,389		—		1,389		—		1,758		—		1,758
Government debt ²	—		753		—		753		—		957		—		957
Other long-term assets:
Derivative assets	—		74		9		83		—		31		9		40
Loans receivable	—		543		—		543		—		236		—		236
Total assets measured and recorded at fair value	9,820		17,111		20		26,951		8,168		19,559		21		27,748
Liabilities
Other accrued liabilities:
Derivative liabilities	—		449		—		449		—		371		—		371
Other long-term liabilities:
Derivative liabilities	—		166		7		173		—		179		33		212
Total liabilities measured and recorded at fair value	$	—	$	615	$	7	$	622	$	—	$	550	$	33	$	583


¹	Level 1 investments consist of money market funds. Level 2 investments consist primarily of commercial paper, certificates of deposit, time deposits, and notes and bonds issued by financial institutions.


²	Level 1 investments consist primarily of US Treasury securities. Level 2 investments consist primarily of US Agency notes and non-U.S. government debt.

In the second quarter of 2017, we began assigning fair value hierarchy levels based on the underlying instrument type for our fixed income portfolio. We have reclassified prior period amounts to conform to the current period presentation.

Fair Value Option for Loans Receivable

As of September 30, 2017 and December 31, 2016, the fair value of our loans receivable for which we elected the fair value option did not significantly differ from the contractual principal balance based on the contractual currency.

Assets Measured and Recorded at Fair Value on a Non-Recurring Basis

Our non-marketable equity investments, marketable equity method investments, and non-financial assets, such as intangible assets and property, plant and equipment, are recorded at fair value only if an impairment is recognized.

We classified non-marketable equity investments as Level 3. Impairments recognized on non-marketable equity investments held as of September 30, 2017 were insignificant during the third quarter of 2017 and $335 million during the first nine months of 2017 ($48 million during the third quarter of 2016 and $132 million during the first nine months of 2016 on non-marketable equity investments held as of October 1, 2016).

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

The carrying amounts and fair values of financial instruments not recorded at fair value on a recurring basis at the end of each period were as follows:



	September 30, 2017
(In Millions)	Carrying Amount		Fair Value Measured Using						Fair Value
(In Millions)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
Grants receivable	$	646	$	—	$	646	$	—	$	646
Loans receivable	$	15	$	—	$	15	$	—	$	15
Non-marketable cost method investments	$	2,719	$	—	$	—	$	3,336	$	3,336
Reverse repurchase agreements	$	250	$	—	$	250	$	—	$	250
Short-term debt	$	4,121	$	—	$	4,703	$	—	$	4,703
Long-term debt	$	27,498	$	—	$	29,485	$	—	$	29,485



	December 31, 2016
(In Millions)	Carrying Amount		Fair Value Measured Using						Fair Value
(In Millions)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
Grants receivable	$	361	$	—	$	362	$	—	$	362
Loans receivable	$	265	$	—	$	265	$	—	$	265
Non-marketable cost method investments	$	3,098	$	—	$	—	$	3,890	$	3,890
Reverse repurchase agreements	$	250	$	—	$	250	$	—	$	250
Short-term debt	$	4,609	$	—	$	5,120	$	—	$	5,120
Long-term debt	$	20,649	$	—	$	21,957	$	—	$	21,957

The carrying amount and fair value of short-term debt exclude drafts payable.

In the third quarter of 2017, we began assigning fair value hierarchy levels for our short-term and long-term debt based on the underlying instrument type. We have reclassified prior period amounts to conform to the current period presentation.