Fair Value Measurements (Notes)

3 Months Ended

May 03, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

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 May 3, 2013, and February 1, 2013:

	May 3, 2013								February 1, 2013
	Level 1(a)		Level 2 (a)		Level 3		Total		Level 1 (a)		Level 2 (a)		Level 3		Total
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs				Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
							(in millions)
Assets:
Cash equivalents:
Money market funds	$	6,679	$	—	$	—	$	6,679	$	8,869	$	—	$	—	$	8,869
Non- U.S. government and agencies	—		3		—		3		—		—		—		—
Debt securities:
Non- U.S. government and agencies	—		87		—		87		—		96		—		96
Commercial paper	—		6		—		6		—		6		—		6
U.S. corporate	—		1,651		—		1,651		—		1,701		—		1,701
International corporate	—		760		—		760		—		700		—		700
Equity and other securities	—		121		—		121		1		112		—		113
Derivative instruments	—		99		—		99		—		68		—		68
Total assets	$	6,679	$	2,727	$	—	$	9,406	$	8,870	$	2,683	$	—	$	11,553
Liabilities:
Derivative instruments	$	—	$	11	$	—	$	11	$	—	$	16	$	—	$	16
Total liabilities	$	—	$	11	$	—	$	11	$	—	$	16	$	—	$	16

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^(a) Dell did not transfer any securities between levels during the three months endedMay 3, 2013 or during the fiscal year ended February 1, 2013.

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 with original maturities of 90 days or less and valued at fair value.  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. Dell reviews security pricing and assesses liquidity on a quarterly basis.

Debt Securities— The majority of Dell's debt securities consists of various fixed income securities such as U.S. corporate, international corporate, and non-U.S. government and agencies. 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 reviews security pricing and assesses liquidity on a quarterly basis. See Note 3 of the Notes to the Condensed Consolidated Financial Statements for additional information about investments.

Equity and Other Securities— The majority of Dell's investments in equity and other securities that are measured at fair value on a recurring basis consist of various mutual funds held in Dell's Deferred Compensation Plan. The valuation of these securities is based on pricing models whereby all significant inputs are observable or can be derived from or corroborated by observable market data. The valuation for the Level 1 position is based on quoted prices in active markets.

Derivative Instruments— Dell's derivative financial instruments consist primarily of foreign currency forward and purchased option contracts and interest rate swaps. The fair value of the portfolio is determined using valuation models based on market observable inputs, including interest rate curves, forward and spot prices for currencies, and implied volatilities. Credit risk is factored into the fair value calculation of Dell's derivative instrument portfolio.  For interest rate derivative instruments, credit risk is determined at the contract levelwith the use of credit default spreads of either Dell, when in a net liability position, or the relevant counterparty, when in a net asset position.  For foreign exchange derivative instruments, credit risk is determined in a similar manner, except that the credit default spread is applied based on the net position of eachcounterparty with the use of the appropriate credit default spreads.See Note 6 of the Notes to the Condensed Consolidated Financial Statements for a description of Dell's derivative financial instrument activities.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis— Certain assets are measured at fair value on a nonrecurring basis and therefore are not included in the recurring fair value table above. These assets consist primarily of investments accounted for under the cost method and non-financial assets such as goodwill and intangible assets. Investments accounted for under the cost method included in equity and other securities were $164 million and $157 million as of May 3, 2013, and February 1, 2013, respectively. Goodwill, intangible assets, and investments accounted for under the cost method are measured at fair value initially and subsequently when there is an indicator of impairment and the impairment is recognized. See Note 7 of the Notes to the Condensed Consolidated Financial Statements for additional information about goodwill and intangible assets.