Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

v3.20.2
Fair Value Measurements
 12 Months Ended
Sep. 27, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]  
Fair Value Measurements Fair Value Measurements
The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at September 27, 2020 (in millions):
Level 1 Level 2 Level 3 Total
Assets        
Cash equivalents $ 2,283  $ 3,248  $ —  $ 5,531 
Marketable securities:        
U.S. Treasury securities and government-related securities —  10  —  10 
Corporate bonds and notes —  4,049  —  4,049 
Mortgage- and asset-backed and auction rate securities —  66  35  101 
Equity securities 352  —  —  352 
Total marketable securities 352  4,125  35  4,512 
Derivative instruments —  51  —  51 
Other investments 501  —  13  514 
Total assets measured at fair value $ 3,136  $ 7,424  $ 48  $ 10,608 
Liabilities        
Derivative instruments $ —  $ 7  $ —  $ 7 
Other liabilities 501  —  —  501 
Total liabilities measured at fair value $ 501  $ 7  $ —  $ 508 
Activity within Level 3 of the Fair Value Hierarchy. Other investments included in Level 3 at September 27, 2020 and September 29, 2019 were comprised of non-marketable debt instruments, and other liabilities included in Level 3 at September 29, 2019 were comprised of contingent consideration related to business combinations. Activity for marketable securities, other investments and other liabilities classified within Level 3 of the valuation hierarchy was insignificant during fiscal 2020 (primarily related to impairment of certain of our non-marketable debt instruments, purchases and settlements of
non-marketable debt instruments and payments of contingent consideration related to certain business acquisitions) and fiscal 2019 (primarily related to issuances of non-marketable debt instruments and payments of contingent consideration).
Nonrecurring Fair Value Measurements. We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities include equity method and non-marketable equity investments, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. During fiscal 2020, certain of our non-marketable equity investments were written down to their estimated fair values, which was recorded as a component of impairment losses on other investments in investment and other income, net (Note 2), and certain other non-marketable equity investments were remeasured to their estimated fair values based on observable price changes in orderly transactions for identical or similar securities, which was recorded as a component of net gains on other investments in investment and other income, net (Note 2). For a significant portion of the impairments, the estimated fair values resulted in a full write-off of the carrying values. The estimation of fair values was judgmental in nature and involved the use of significant estimates and assumptions. We determined these fair value measurements primarily using a market approach and key inputs and assumptions included estimated market value of assets, ability of investees to access additional financing or otherwise continue as a going concern, volatility and liquidation and other rights of the securities we hold.
During 2019, certain property, plant and equipment, non-marketable equity investments, intangible assets and goodwill were written down to their estimated fair values. We also measured certain non-marketable equity investments received as non-cash consideration at fair value on a nonrecurring basis (Note 2). We determined these fair value measurements using cost, market and income approaches.
The estimation of fair value used in the fair value measurements required the use of significant unobservable inputs, and as a result, the fair value measurements were classified as Level 3. We did not have any other significant assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition for all periods presented.