Adient plcADNT

Adient plc Fair Value Disclosure

10-KFiled Nov 18, 20253 min read
11. Fair Value Measurements

ASC 820, “Fair Value Measurement,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.
Recurring Fair Value Measurements

The following tables present Adient's fair value hierarchy for those assets and liabilities measured at fair value. Refer to Note 14, “Retirement Plans,” of the notes to consolidated financial statements for fair value tables of pension assets.

 Fair Value Measurements Using:
(in millions)Total as of
September 30,
2025		Quoted Prices
in Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Other current assets
Foreign currency exchange derivatives$36 $— $36 $— 
Other noncurrent assets
Foreign currency exchange derivatives1 — 1 — 
Total assets$37 $— $37 $— 
Other current liabilities
Foreign currency exchange derivatives$7 $— $7 $— 
Cross currency interest rate swaps1 — 1 — 
Other noncurrent liabilities
Foreign currency exchange derivatives3 — 3 — 
Cross currency interest rate swaps3 — 3 — 
Total liabilities$14 $— $14 $— 

 Fair Value Measurements Using:
(in millions)Total as of
September 30,
2024		Quoted Prices
in Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Other current assets
Foreign currency exchange derivatives$15 $— $15 $— 
Other noncurrent assets
Foreign currency exchange derivatives3 — 3 — 
Total assets$18 $— $18 $— 
Other current liabilities
Foreign currency exchange derivatives$32 $— $32 $— 
Other noncurrent liabilities
Foreign currency exchange derivatives9 — 9 — 
Total liabilities$41 $— $41 $— 

Valuation Methods

Foreign currency exchange derivatives Adient selectively hedges anticipated transactions and net investments that are subject to foreign exchange rate risk primarily using foreign currency exchange hedge contracts. The foreign currency exchange derivatives are valued under a market approach using publicized spot and forward prices. Changes in fair value on foreign exchange derivatives accounted for as hedging instruments under ASC 815 are initially recorded as a component of AOCI and are subsequently reclassified into earnings when the hedged transactions occur and affect earnings. These contracts were highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates at September 30, 2025 and 2024, respectively. The changes in fair value of foreign currency exchange derivatives not designated as hedging instruments under ASC 815 are recorded in the consolidated statements of income (loss).
The fair value of long-term debt, which was $2.5 billion and $2.4 billion at both September 30, 2025 and 2024, respectively, was determined primarily using market quotes classified as Level 1 inputs within the ASC 820 fair value hierarchy.

Historical Timeline

Fiscal YearFiled
2025Nov 18, 2025Showing above
2024Nov 18, 2024
2023Nov 17, 2023
2022Nov 22, 2022
2021Nov 23, 2021
2020Nov 30, 2020
2019Nov 22, 2019
2018Nov 29, 2018
2017Nov 22, 2017

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance