Note 16 - Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Fair value standards under U.S. GAAP define fair value, establish a framework for measuring fair value in applying generally accepted accounting principles, and require disclosures about fair value measurements. The standards also identify two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable. Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions. Once inputs have been characterized, the inputs are prioritized into one of three broad levels (provided in the table below) used to measure fair value. Fair value standards apply whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement and require the use of observable market data when available.

The following tables provide fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis; Level 1, quoted market prices in active markets for identical assets, Level 2, significant other observable inputs, and Level 3, significant unobservable inputs (in millions):

			Fair value measurements at reporting date								Fair value measurements at reporting date
	December 31,								December 31,
(in millions)	2021		(Level 1)		(Level 2)		(Level 3)		2020		(Level 1)		(Level 2)		(Level 3)
Current assets:
Other current assets (1)(2)	$	352	$	10	$	336	$	6	$	152			$	148	$	4
Non-current assets:
Investments (3)									$	137	$	137
Other assets (1)	$	175			$	164	$	11	$	139			$	123	$	16
Current liabilities:
Other accrued liabilities (1)	$	144			$	144			$	189			$	189
Non-current liabilities:
Other liabilities (1)(4)	$	66			$	66			$	155			$	155

(1)	Derivative assets and liabilities include foreign exchange contracts which are measured using observable inputs for similar assets and liabilities.
(2)	Equity securities with readily available fair values that were measured using Level 1 inputs were reclassified from investments to other current assets and subsequently sold for $84 million during the year ended December 31, 2021.

(3) Included in investments as of December 31, 2020 were equity securities with readily available fair values that were measured using Level 1 inputs. A pre-tax gain of $107 million was recorded from the initial public offering of an investment for the year ended December 31, 2020.

(4) Other liabilities as of December 31, 2021 include a $17 million put option pursuant to the Share Repurchase Agreement with SDC, which was measured using significant other observable (Level 2) inputs. Refer to Note 17 (Shareholders' Equity) to the consolidated financial statements for additional information

Assets and Liabilities Measured on a Non-Recurring Basis

For the year ended December 31, 2020, Corning incurred a long-lived asset impairment and disposal loss for an asset group related to the reassessment of research and development programs within “All Other”. Given the economic environment and market opportunities, Corning discontinued its investment in these research and development programs. The impairment analysis and disposition of certain assets resulted in a total pre-tax charge of $217 million, which was substantially all the carrying value, inclusive of an insignificant amount of goodwill. The fair value of the asset group for the impairment analysis was measured using unobservable (Level 3) inputs.

Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) to the consolidated financial statements for additional information about this impairment.

Fair value measurements (Level 3) related to the Redemption are disclosed in Note 4 (HSG Transactions and Acquisitions) to the consolidated financial statements. There were no other significant financial assets and liabilities measured on a nonrecurring basis as of December 31, 2021 and 2020.