XML 28 R18.htm IDEA: XBRL DOCUMENT
v3.23.1

FAIR VALUE MEASUREMENTS (Notes) | 6 Months Ended
--- | ---
Apr. 30, 2023
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy The guidance establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value: Level 1- applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2- applies to assets or liabilities for which there are inputs other than quoted prices included within level 1 that are observable, either directly or indirectly, for the asset or liability such as: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in less active markets; or other inputs that can be derived principally from, or corroborated by, observable market data. Level 3- applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis as of April 30, 2023 were as follows:
|  |  | Fair Value Measurement at April 30, 2023 Using
| April 30, 2023 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (in millions)
Assets: |  |  |  |  |  |  |
Short-term |  |  |  |  |  |  |
Cash equivalents (money market funds) | $ | 526 |  |  | $ | 526 |  |  | $ | — |  |  | $ | — |
Derivative instruments (foreign exchange contracts) | 13 |  |  | — |  |  | 13 |  |  | — |
Long-term |  |  |  |  |  |  |
Trading securities | 37 |  |  | 37 |  |  | — |  |  | — |
Other investments | 28 |  |  | — |  |  | 28 |  |  | — |
Total assets measured at fair value | $ | 604 |  |  | $ | 563 |  |  | $ | 41 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Short-term |  |  |  |  |  |  |
Derivative instruments (foreign exchange contracts) | $ | 11 |  |  | $ | — |  |  | $ | 11 |  |  | $ | — |
Contingent consideration | 7 |  |  | — |  |  | — |  |  | 7 |
Long-term |  |  |  |  |  |  |
Deferred compensation liability | 37 |  |  | — |  |  | 37 |  |  | — |
Contingent consideration | 1 |  |  | — |  |  | — |  |  | 1 |
Total liabilities measured at fair value | $ | 56 |  |  | $ | — |  |  | $ | 48 |  |  | $ | 8 |
Financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2022 were as follows:
|  |  | Fair Value Measurement at October 31, 2022 Using
| October 31, 2022 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (in millions)
Assets: |  |  |  |  |  |  |
Short-term |  |  |  |  |  |  |
Cash equivalents (money market funds) | $ | 492 |  |  | $ | 492 |  |  | $ | — |  |  | $ | — |
Derivative instruments (foreign exchange contracts) | 31 |  |  | — |  |  | 31 |  |  | — |
Long-term |  |  |  |  |  |  |
Trading securities | 31 |  |  | 31 |  |  | — |  |  | — |
Other investments | 23 |  |  | — |  |  | 23 |  |  | — |
Total assets measured at fair value | $ | 577 |  |  | $ | 523 |  |  | $ | 54 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Short-term |  |  |  |  |  |  |
Derivative instruments (foreign exchange contracts) | $ | 5 |  |  | $ | — |  |  | $ | 5 |  |  | $ | — |
Contingent consideration | 66 |  |  | — |  |  | — |  |  | 66 |
Long-term |  |  |  |  |  |  |
Deferred compensation liability | 31 |  |  | — |  |  | 31 |  |  | — |
Contingent consideration | 1 |  |  | — |  |  | — |  |  | 1 |
Total liabilities measured at fair value | $ | 103 |  |  | $ | — |  |  | $ | 36 |  |  | $ | 67 |
Our money market funds and trading securities are generally valued using quoted market prices and therefore are classified within level 1 of the fair value hierarchy. Our derivative financial instruments are classified within level 2, as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets. Our deferred compensation liability is classified as level 2 because, although the values are not directly based on quoted market prices, the inputs used in the calculations are observable. Other investments represent shares we own in a special fund that targets underlying investments of approximately 40 percent in debt securities and 60 percent in equity securities. These shares have been classified as level 2 because, although the shares of the fund are not traded on any active stock exchange, each of the individual underlying securities are or can be derived from and hence we have a readily determinable value for the underlying securities, from which we are able to determine the fair market value for the special fund itself. Trading securities, which are comprised of mutual funds, bonds and other similar instruments, other investments and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in net income. Certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss) within stockholders' equity. Realized gains and losses from the sale of these instruments are recorded in net income. Gains and losses reflected in other income (expense), net for our equity investments with readily determinable fair value ("RDFV") and equity investments without RDFV are summarized below:
| Three Months Ended |  | Six Months Ended
| April 30, |  | April 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (in millions)
Net loss recognized during the period on equity securities | $ | 4 |  |  | $ | 15 |  |  | $ | 14 |  |  | $ | 62 |
Less: Net loss on equity securities sold during the period | $ | 4 |  |  | $ | — |  |  | $ | 15 |  |  | $ | — |
Unrealized (gain) loss on equity securities | $ | — |  |  | $ | 15 |  |  | $ | (1) |  |  | $ | 62 |
Contingent Consideration. The fair value of the contingent consideration liability relates to milestone payments in connection with three acquisitions, including Resolution Bioscience in April 2021. Resolution Bioscience. The fair value of the potential future milestone payments, which is set to certain revenue and technical targets, was based on (i) the probability of achieving the relevant revenue targets and technical milestones and (ii) the timing of achieving such milestones, which are significant unobservable inputs, and has been classified as Level 3. We used the Monte Carlo simulation approach to estimate the fair value of the revenue component which resulted in a fair value of zero. A change in any of these unobservable inputs can significantly change the fair value of the contingent consideration. As of April 30, 2023, the expected maximum earn-out period for the contingent payments does not exceed 1.7 years and potential future payments will not exceed $60 million. The contingent consideration liability is our only recurring Level 3 asset or liability. A summary of the Level 3 activity follows:
| Three Months Ended |  | Six Months Ended
| April 30, |  | April 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (in millions)
Beginning balance | $ | 3 |  |  | $ | 92 |  |  | $ | 67 |  |  | $ | 89 |
Additions to contingent consideration (including measurement period adjustment) | $ | 5 |  |  | $ | 3 |  |  | $ | 5 |  |  | $ | 3 |
Payments | $ | — |  |  | $ | — |  |  | $ | (65) |  |  | $ | — |
Change in fair value (included within selling, general and administrative expenses) | $ | — |  |  | $ | (28) |  |  | $ | 1 |  |  | $ | (25) |
Ending balance | $ | 8 |  |  | $ | 67 |  |  | $ | 8 |  |  | $ | 67 |
The fair value of the contingent consideration liability as of April 30, 2023, was estimated to be $8 million of which $7 million was recorded in other accrued liabilities and $1 million was recorded in other long-term liabilities on the condensed consolidated balance sheet. During the six months ended April 30, 2023, we made a contingent consideration payment of $65 million related to the achievement of a certain technical milestone associated with our acquisition of Resolution Bioscience. Impairment of Investments. There were no impairments of investments for the three and six months ended April 30, 2023 and 2022. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis For the three and six months ended April 30, 2023 and 2022, there were no impairments of long-lived assets held and used or long-lived assets held for sale. Non-Marketable Equity Securities For the three and six months ended April 30, 2023 and 2022, there were no impairments or unrealized gain (loss) adjustments to the carrying value of non-marketable securities without readily determinable fair value based on an observable market transaction. As of April 30, 2023, the cumulative net gain (loss) on our non-marketable equity securities without readily determinable fair values was comprised of a $35 million gain and no losses, and the carrying amount was $121 million. As of April 30, 2022, the cumulative net gain (loss) on our non-marketable equity securities without readily determinable fair values was comprised of a $33 million gain and no losses, and the carrying amount was $128 million. Fair values for the non-marketable securities included in long-term investments on the condensed consolidated balance sheet were measured using Level 3 inputs because they are primarily equity stock issued by private companies without quoted market prices. To estimate the fair value of our non-marketable securities, we use the measurement alternative to record these investments at cost and adjust for impairments and observable price changes (orderly transactions for the identical or a similar security from the same issuer) as and when they occur.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration