Fair Value


(a)	Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions):



	JULY 27, 2019						JULY 28, 2018
	FAIR VALUE MEASUREMENTS						FAIR VALUE MEASUREMENTS
	Level 1		Level 2		Total Balance		Level 1		Level 2		Total Balance
Assets:
Cash equivalents:
Money market funds	$	10,083	$	—	$	10,083	$	6,890	$	—	$	6,890
Available-for-sale debt investments:
U.S. government securities	—		808		808		—		7,275		7,275
U.S. government agency securities	—		169		169		—		727		727
Non-U.S. government and agency securities	—		—		—		—		208		208
Corporate debt securities	—		19,262		19,262		—		27,364		27,364
U.S. agency mortgage-backed securities	—		1,421		1,421		—		1,435		1,435
Equity investments:
Marketable equity securities	3		—		3		605		—		605
Derivative assets	—		89		89		—		2		2
Total	$	10,086	$	21,749	$	31,835	$	7,495	$	37,011	$	44,506
Liabilities:
Derivative liabilities	$	—	$	15	$	15	$	—	$	74	$	74
Total	$	—	$	15	$	15	$	—	$	74	$	74

Level 1 marketable equity securities are determined by using quoted prices in active markets for identical assets. Level 2 available-for-sale debt investments are priced using quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data. Our derivative instruments are primarily classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs. We did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.


(b)	Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents gains and losses on assets that were measured at fair value on a nonrecurring basis (in millions):



	TOTAL GAINS (LOSSES) FOR THE YEARS ENDED
	July 27, 2019			July 28, 2018			July 29, 2017
Non-marketable equity securities and equity method investments	$	(32	)	$	(62	)	$	(177	)
Purchased intangible assets (impaired)	—			(1		)	(47		)
Property held for sale - land and buildings	—			20			(30		)
Total gains (losses) for nonrecurring measurements	$	(32	)	$	(43	)	$	(254	)

These assets were measured at fair value due to events or circumstances we identified as having significant impact on their fair value during the respective periods. The carrying value of our non-marketable equity securities recorded to fair value on a non-recurring basis is adjusted for observable transactions for identical or similar investments of the same issuer or impairment. These securities are classified as Level 3 in the fair value hierarchy because we estimate the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs such as volatility, rights, and obligations of the securities we hold.

The fair value for purchased intangibles assets measured at fair value on a nonrecurring basis was categorized as Level 3 due to the use of significant unobservable inputs in the valuation. Significant unobservable inputs that were used included expected revenues and net income related to the assets and the expected life of the assets. The difference between the estimated fair value and the carrying value of the assets was recorded as an impairment charge, which was included in product cost of sales and operating expenses as applicable. See Note 5.

The fair value of property held for sale was measured with the assistance of third-party valuation models, which used discounted cash flow techniques as part of their analysis. The fair value measurement was categorized as Level 3, as significant unobservable inputs were used in the valuation report. The impairment charges as a result of the valuations, which represented the difference between the fair value less cost to sell and the carrying amount of the assets held for sale, were included in restructuring and other charges.


(c)	Other Fair Value Disclosures

The fair value of our short-term loan receivables and financed service contracts approximates their carrying value due to their short duration. The aggregate carrying value of our long-term loan receivables and financed service contracts as of July 27, 2019 and July 28, 2018 was $3.7 billion and $3.6 billion, respectively. The estimated fair value of our long-term loan receivables and financed service contracts approximates their carrying value. We use significant unobservable inputs in determining discounted cash flows to estimate the fair value of our long-term loan receivables and financed service contracts, and therefore they are categorized as Level 3.

As of July 27, 2019 and July 28, 2018, the estimated fair value of our short-term debt approximates its carrying value due to the short maturities. As of July 27, 2019, the fair value of our senior notes and other long-term debt was $22.1 billion, with a carrying amount of $20.5 billion. This compares to a fair value of $26.4 billion and a carrying amount of $25.6 billion as of July 28, 2018. The fair value of the senior notes and other long-term debt was determined based on observable market prices in a less active market and was categorized as Level 2 in the fair value hierarchy.