Fair Value

3 Months Ended

Jan. 31, 2020

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

Fair Value Hierarchy

The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use.

Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement:

Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs.

Level 3—Unobservable inputs for the asset or liability.

The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs.

The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:



	As of January 31, 2020								As of October 31, 2019
	Fair Value Measured Using								Fair Value Measured Using
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	In millions
Assets
Cash Equivalents and Investments:
Time deposits	$	—	$	671	$	—	$	671	$	—	$	803	$	—	$	803
Money market funds	607		—		—		607		859		—		—		859
Foreign bonds	1		123		—		124		7		126		—		133
Other debt securities	—		—		31		31		—		—		32		32
Derivative Instruments:
Interest rate contracts	—		96		—		96		—		73		—		73
Foreign exchange contracts	—		399		—		399		—		392		—		392
Other derivatives	—		1		—		1		—		3		—		3
Total assets	$	608	$	1,290	$	31	$	1,929	$	866	$	1,397	$	32	$	2,295
Liabilities
Derivative Instruments:
Interest rate contracts	$	—	$	6	$	—	$	6	$	—	$	11	$	—	$	11
Foreign exchange contracts	—		123		—		123		—		136		—		136
Other derivatives	—		1		—		1		—		—		—		—
Total liabilities	$	—	$	130	$	—	$	130	$	—	$	147	$	—	$	147

During the three months ended January 31, 2020, there were no transfers between levels within the fair value hierarchy.

Other Fair Value Disclosures

Short-Term and Long-Term Debt: At January 31, 2020 and October 31, 2019, the estimated fair value of the Company's short-term and long-term debt was $14.8 billion and $14.6 billion, respectively.

- 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.

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