DXC Technology CoDXC

DXC Technology Co Fair Value Disclosure

10-KFiled May 19, 20233 min read
Fair Value
Fair Value Measurements on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis, excluding pension assets and derivative assets and liabilities. See Note 14 - "Pension and Other Benefit Plans" and Note 7 - "Derivative Instruments" for information about these excluded assets and liabilities. There were no transfers between any of the levels during the periods presented.
Fair Value Hierarchy
(in millions)As of March 31, 2023
Assets:Fair ValueLevel 1Level 2Level 3
Money market funds and money market deposit accounts$75 $75 $— $— 
Time deposits(1)
37 37 — — 
Other securities(2)
48 — 46 2 
Total assets$160 $112 $46 $2 
Liabilities:
Contingent consideration$2 $— $— $2 
Total liabilities$2 $— $— $2 


(in millions)As of March 31, 2022
Assets:Fair ValueLevel 1Level 2Level 3
Money market funds and money market deposit accounts$5 $5 $— $— 
Time deposits(1)
51 51 — — 
Other securities(2)
51 — 49 2 
Total assets$107 $56 $49 $2 
Liabilities:
Contingent consideration$8 $— $— $8 
Total Liabilities$8 $— $— $8 
        

(1) Cost basis approximated fair value due to the short period of time to maturity.
(2) Other securities include available-for-sale equity security investments with Level 2 inputs that have a cost basis of $52 million and $53 million as of March 31, 2023 and March 31, 2022, respectively. For the periods presented, gains and losses are insignificant and are included in other expense (income), net in the Company’s statements of operations.
The fair value of money market funds, money market deposit accounts, U.S. Treasury bills with less than three months maturity and time deposits, included in cash and cash equivalents, are based on quoted market prices. The fair value of other equity securities, included in other long-term assets, is based on actual market prices. The fair value of contingent consideration, included in other liabilities, is based on contractually defined targets of financial performance in connection with earn outs and other considerations.

Other Fair Value Disclosures

The carrying amounts of the Company’s financial instruments with short-term maturities, primarily accounts receivable, accounts payable, short-term debt, and financial liabilities included in other accrued liabilities approximate their market values due to their short-term nature. If measured at fair value, these financial instruments would be classified as Level 2 or Level 3 within the fair value hierarchy.

Note 11 - “Debt” includes information about the estimated fair value of the Company's long-term debt.

Non-financial assets such as goodwill, tangible assets, intangible assets, and other contract related long-lived assets are recorded at fair value in the period they are initially recognized; and such fair value may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired. The fair value measurements in such instances would be classified as Level 3 within the fair value hierarchy. There were no significant impairments recorded during the fiscal periods covered by this report.

Historical Timeline

Fiscal YearFiled
2023May 19, 2023Showing above
2022May 26, 2022
2021May 28, 2021
2020Jun 1, 2020
2019Jun 13, 2019
2018May 29, 2018

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

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