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Fair value measurements
12 Months Ended
Aug. 31, 2018
Fair Value Disclosures [Abstract]  
Fair value measurements
Fair value measurements
The Company measures certain assets and liabilities in accordance with 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):
 
 
August 31, 2018
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Money market funds1
 
$
227

 
$
227

 
$

 
$

Available-for-sale investments2
 
1

 
1

 

 

Foreign currency forwards3
 
52

 

 
52

 

Liabilities:
 
 

 
 

 
 

 
 

Interest rate swaps4
 
1

 

 
1

 

Foreign currency forwards3
 
4

 

 
4

 

 
 
August 31, 2017
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Money market funds1
 
$
2,096

 
$
2,096

 
$

 
$

Available-for-sale investments2
 
1

 
1

 

 

Liabilities:
 
 
 
 
 
 
 
 
Foreign currency forwards3
 
19

 

 
19

 



1 
Money market funds are valued at the closing price reported by the fund sponsor.
2 
Fair values of quoted investments are based on bid prices as of August 31, 2018 and 2017.
3 
The 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.
4 
The fair value of interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See note 8, financial instruments, for additional information.

There were no transfers between Levels in fiscal 2018 or 2017.

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. Unless otherwise noted, the fair value for all notes was determined based upon quoted market prices and therefore categorized as Level 1. See note 7, 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.