MICROSOFT CORP | 2013 | FY | 3


NOTE 6 — FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the fair value of our financial instruments that are measured at fair value on a recurring basis:

 

(In millions)      Level 1        Level 2        Level 3       

 

 

Gross

Fair

Value

  

  

  

    Netting  (a)     
 
Net Fair
Value
  
  


June 30, 2013                                     
Assets                                     

Mutual funds

   $ 868        $ 0        $ 0        $ 868        $ 0      $ 868     

Commercial paper

     0        603        0        603        0        603   

Certificates of deposit

     0        994        0        994        0        994   

U.S. government and agency securities

     62,237        2,664        0        64,901        0        64,901   

Foreign government bonds

     9        851        0        860        0        860   

Mortgage-backed securities

     0        1,311        0        1,311        0        1,311   

Corporate notes and bonds

     0        4,915        19        4,934        0        4,934   

Municipal securities

     0        385        0        385        0        385   

Common and preferred stock

     8,470        717        5        9,192        0        9,192   

Derivatives

     12        489        0        501        (81     420   


 


 


 


 


 


Total

   $   71,596      $ 12,929      $ 24      $ 84,549      $ (81   $   84,468   
    


 


 


 


 


 


Liabilities                                     

Derivatives and other

   $ 14      $ 121      $ 0      $ 135      $ (80   $ 55   


(In millions)      Level 1        Level 2        Level 3       

 

 

Gross

Fair

Value

  

  

  

    Netting  (a)     
 
Net Fair
Value
  
  


June 30, 2012                                     
Assets                                     

Mutual funds

   $ 820      $ 0      $ 0      $ 820      $ 0      $ 820   

Commercial paper

     0        96        0        96        0        96   

Certificates of deposit

     0        744        0        744        0        744   

U.S. government and agency securities

     42,291        5,019        0        47,310        0        47,310   

Foreign government bonds

     31        1,703        0        1,734        0        1,734   

Mortgage-backed securities

     0        1,892        0        1,892        0        1,892   

Corporate notes and bonds

     0        7,839        9        7,848        0        7,848   

Municipal securities

     0        416        0        416        0        416   

Common and preferred stock

     7,539        877        5        8,421        0        8,421   

Derivatives

     16        467        0        483        (141     342   


 


 


 


 


 


Total

   $ 50,697      $   19,053      $   14      $   69,764      $   (141   $   69,623   
    


 


 


 


 


 


Liabilities                                     

Derivatives and other

   $ 10      $ 145      $ 0      $ 155      $ (139   $ 16   

 

(a)

These amounts represent the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk.

The changes in our Level 3 financial instruments that are measured at fair value on a recurring basis were immaterial during the periods presented.

 

The following table reconciles the total Net Fair Value of assets above to the balance sheet presentation of these same assets in Note 4 – Investments.

 

(In millions)  


June 30,    2013     2012  

Net fair value of assets measured at fair value on a recurring basis

   $ 84,468      $ 69,623   

Cash

     1,967        2,019   

Common and preferred stock measured at fair value on a nonrecurring basis

     395        313   

Other investments measured at fair value on a nonrecurring basis

     1,256        1,043   

Less derivative net assets classified as other current assets

     (213     (185

Other

     (7     3   


 


Recorded basis of investment components

   $   87,866      $   72,816   
    


 


Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During fiscal year 2013 and 2012, we did not record any material other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis.


us-gaap:FairValueDisclosuresTextBlock