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Fair value measurements
3 Months Ended
Nov. 30, 2021
Fair Value Disclosures [Abstract]  
Fair value measurements Fair value measurements
The Company measures certain assets and liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In addition, it establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2 - Observable inputs other than quoted prices in active markets.
Level 3 - Unobservable inputs for which there is little or no market data available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
 November 30, 2021Level 1Level 2Level 3
Assets:
    
Money market funds 1
$319 $319 $— $— 
Investments in equity securities 2
— — 
Investments in debt securities 3
20 — — 20 
Foreign currency forwards 5
81 — 81 — 
Cross currency interest rate swaps 6
— — 
Liabilities:
    
Foreign currency forwards 5
$$— $$— 
Cross currency interest rate swaps 6
12 — 12 — 
Total return swap11 — 11 — 
 August 31, 2021Level 1Level 2Level 3
Assets:
    
Money market funds 1
$634 $634 $— $— 
Investments in equity securities 2
— — 
Investments in debt securities 4
663 — — 663 
Foreign currency forwards 5
46 — 46 — 
Cross currency interest rate swaps 6
— — 
Total return swaps— — 
Liabilities:
Foreign currency forwards 5
$$— $$— 
Cross currency interest rate swaps 6
32 — 32 — 

1Money market funds are valued at the closing price reported by the fund sponsor.
2Fair values of quoted investments are based on current bid prices as of November 30, 2021 and August 31, 2021.
3Level 3 debt securities are valued using standard valuation techniques based on income and market approach.
4Level 3 debt securities include investments in convertible debt securities of VillageMD which are valued on a quarterly basis using the Probability Weighted Expect Return Method with gains or losses recorded in Other Comprehensive Income. Inputs include the enterprise value, expected holding term of the investment, volatility and risk-free interest rates.
5The fair value of forward currency contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates. See Note 9 Financial instruments, for additional information.
6The fair value of interest rate swaps and cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 9 Financial instruments, for additional information.

There were no transfers between Levels for the three months ended November 30, 2021.
The Company reports its debt instruments under the guidance of ASC Topic 825, Financial Instruments, which requires disclosure of the fair value of the Company’s debt in the footnotes to the Consolidated Financial Statements. As of November 30, 2021 the carrying amounts and estimated fair values of long-term notes outstanding including the current portion were $8.5 billion and $9.2 billion, respectively. The fair values of the notes outstanding are Level 1 fair value measures and determined based on quoted market prices and translated at the November 30, 2021 rate, as applicable. The fair values and carrying values of these issuances do not include notes that have been redeemed or repaid as of November 30, 2021. See Note 8 Debt, for further information.

The carrying values of accounts receivable and trade accounts payable approximated their respective fair values due to their short-term nature.