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Fair Value Measurements | 9 Months Ended
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Apr. 30, 2023
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements We categorize financial assets and liabilities based on the following fair value hierarchy: •Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. •Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with observable market data. •Level 3: Unobservable inputs, which are valued based on our estimates of assumptions that market participants would use in pricing the asset or liability. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. When available, we use unadjusted quoted market prices to measure the fair value and classify such items as Level 1. If quoted market prices are not available, we base fair value upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Included in the fair value of derivative instruments is an adjustment for credit and nonperformance risk. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis as of April 30, 2023, and July 31, 2022, consistent with the fair value hierarchy:
| Fair Value as of April 30, 2023 |  | Fair Value Measurements at April 30, 2023 Using Fair Value Hierarchy |  | Fair Value as of July 31, 2022 |  | Fair Value Measurements at July 31, 2022 Using Fair Value Hierarchy
(Millions) | Level 1 |  | Level 2 |  | Level 3 |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forward contracts(1) | $ | 3 |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
Commodity derivative contracts(2) | 4 |  |  | — |  |  | — |  |  | 4 |  |  | 23 |  |  | — |  |  | 19 |  |  | 4 |
Deferred compensation derivative contracts(3) | 1 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Deferred compensation investments(4) | 1 |  |  | 1 |  |  | — |  |  | — |  |  | 2 |  |  | 2 |  |  | — |  |  | — |
Total assets at fair value | $ | 9 |  |  | $ | 1 |  |  | $ | 4 |  |  | $ | 4 |  |  | $ | 27 |  |  | $ | 2 |  |  | $ | 21 |  |  | $ | 4 |
| Fair Value as of April 30, 2023 |  | Fair Value Measurements at April 30, 2023 Using Fair Value Hierarchy |  | Fair Value as of July 31, 2022 |  | Fair Value Measurements at July 31, 2022 Using Fair Value Hierarchy
(Millions) |  | Level 1 |  | Level 2 |  | Level 3 |  |  | Level 1 |  | Level 2 |  | Level 3
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity derivative contracts(2) | $ | 23 |  |  | $ | 15 |  |  | $ | 8 |  |  | $ | — |  |  | $ | 30 |  |  | $ | 6 |  |  | $ | 24 |  |  | $ | — |
Deferred compensation derivative contracts(3) | — |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | 4 |  |  | — |
Deferred compensation obligation(4) | 90 |  |  | 90 |  |  | — |  |  | — |  |  | 96 |  |  | 96 |  |  | — |  |  | — |
Total liabilities at fair value | $ | 113 |  |  | $ | 105 |  |  | $ | 8 |  |  | $ | — |  |  | $ | 130 |  |  | $ | 102 |  |  | $ | 28 |  |  | $ | — |
___________________________________ (1)Based on observable market transactions of spot currency rates and forward rates. (2)Level 1 and 2 are based on quoted futures exchanges and on observable prices of futures and options transactions in the marketplace. Level 3 is based on unobservable inputs in which there is little or no market data, which requires management’s own assumptions within an internally developed model. (3)Based on index swap rates. (4)Based on the fair value of the participants’ investments. The following table summarizes the changes in fair value of Level 3 assets and liabilities for the nine-month periods ended April 30, 2023, and May 1, 2022:
|  | Nine Months Ended
(Millions) |  | April 30, 2023 |  | May 1, 2022
Fair value at beginning of year |  | $ | 4 |  |  | $ | 1 |
Gains (losses) |  | 4 |  |  | 18 |
Settlements |  | (4) |  |  | (11) |
Fair value at end of quarter |  | $ | 4 |  |  | $ | 8 |
Fair Value of Financial Instruments The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value. There were $9 million of cash equivalents at April 30, 2023, and $27 million at July 31, 2022. Cash equivalents represent fair value as these highly liquid investments have an original maturity of three months or less. Fair value of cash equivalents is based on Level 2 inputs. The fair value of short- and long-term debt was $4.459 billion at April 30, 2023, and $4.637 billion at July 31, 2022. The carrying value was $4.759 billion at April 30, 2023, and $4.81 billion at July 31, 2022. The fair value of long-term debt is principally estimated using Level 2 inputs based on quoted market prices or pricing models using current market rates.

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- 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 -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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