Payments

  


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|   |  | June 30, 2021 |
| ($ in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |
| Assets |  |  |  |  |  |  |  |  |
| Commodity contracts |  | $ | —  |  |  | $ | 14  |  |  | $ | —  |  |  | $ | 14  |  |
| Forward exchange contracts |  | —  |  |  | 7  |  |  | —  |  |  | 7  |  |
| Interest rate swaps |  | —  |  |  | 19  |  |  | —  |  |  | 19  |  |
| Total assets measured at fair value |  | $ | —  |  |  | $ | 40  |  |  | $ | —  |  |  | $ | 40  |  |
|  |  |  |  |  |  |  |  |  |
| Liabilities |  |  |  |  |  |  |  |  |
| Contingent purchase consideration liabilities |  | $ | —  |  |  | $ | —  |  |  | $ | 18  |  |  | $ | 18  |  |
|  |  |  |  |  |  |  |  |  |
| Forward exchange contracts |  | —  |  |  | 4  |  |  | —  |  |  | 4  |  |
|  |  |  |  |  |  |  |  |  |
| Total liabilities measured at fair value |  | $ | —  |  |  | $ | 4  |  |  | $ | 18  |  |  | $ | 22  |  |

  
    The fair value of the commodity contracts was determined using a discounted cash flow analysis based on the terms of the contracts and observed market forward prices discounted at a currency specific rate. Forward exchange contract fair values were determined based on quoted prices for similar assets and liabilities in active markets using inputs such as currency rates and forward points. The fair value of the interest rate swaps was determined using a discounted cash flow method based on market based swap yield curves, taking into account current interest rates.  
    Contingent purchase consideration obligations arise from business acquisitions. As of June 30, 2022, the Company's contingent purchase consideration liabilities consist of a $10 million liability that is contingent on future royalty income generated by Discma AG, a subsidiary acquired in March 2017, with the $6 million balance relating to consideration for small business acquisitions where payments are contingent on the Company vacating a certain property or performance criteria. The fair value of the contingent purchase consideration liabilities was determined for each arrangement individually. The fair value was determined using the income approach with significant inputs that are not observable in the market. Key assumptions include the discount rates consistent with the level of risk of achievement and probability adjusted financial projections. The expected outcomes are recorded at net present value, which requires adjustment over the life for changes in risks and probabilities. Changes arising from modifications in forecasts related to contingent consideration are expected to be immaterial.   
    The fair value of contingent purchase consideration liabilities is included in other current liabilities and other non-current liabilities in the consolidated balance sheets. The change in fair value of the contingent purchase consideration liabilities, which was included in other income, net is due to the passage of time and changes in the probability of achievement used to develop the estimate.  
    The following table sets forth a summary of changes in the value of the Company's Level 3 financial liabilities:

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|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   |  | June 30,  |
| ($ in millions) |  | 2022 |  | 2021 |  | 2020 |
| Fair value at the beginning of the year |  | $ | 18  |  |  | $ | 15  |  |  | $ | 14  |  |
|  |  |  |  |  |  |  |
| Changes in fair value of Level 3 liabilities  |  | —  |  |  | 2  |  |  | 1  |  |
| Payments |  | (1) |  |  | —  |  |  | —  |  |
| Foreign currency translation |  | (1) |  |  | 1  |  |  | —  |  |
| Fair value at the end of the year |  | $ | 16  |  |  | $ | 18  |  |  | $ | 15  |  |

  
Assets and Liabilities Measured and Recorded at Fair Value on a Nonrecurring Basis  
    In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis. The Company measures certain assets, including technology intangible assets, equity method and other investments, long-lived assets held for sale, and other long-lived and intangible assets at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of these assets are determined, when applicable, based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections.  
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