v3.26.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2025
EBP 001 [Member]  
EBP, Investment, Fair Value and NAV [Line Items]  
Fair Value Measurements
NOTE 2 — FAIR VALUE MEASUREMENTS
The Plan accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Plan categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
 
  •  
Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. The Plan’s Level 1 non-derivative investments primarily include domestic and international equities, mutual funds, and U.S. government securities. The Plan’s Level 1 derivative assets include those actively traded on exchanges.
 
  •  
Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies and commodities. The Plan’s Level 2 non-derivative investments consist primarily of mutual funds in the Plan’s separately managed accounts. These mutual funds are registered under the Investment Company Act of 1940 but are not registered under the Securities Act of 1933 and the prices are made available directly from the investment manager. The Plan’s Level 2 derivative assets and liabilities primarily include certain over-the-counter option and currency contracts.
 
  •  
Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. As of December 31, 2025 and 2024, the Plan did not hold any financial instruments categorized as Level 3.
Mutual funds are valued at the closing price as reported by the fund. Common stocks are valued at the closing price reported on the active markets on which the individual securities are traded. Brokerage account holdings include a variety of common stocks and mutual funds.
Common collective trusts are valued using the Net Asset Value (“NAV”) as a practical expedient and are not categorized in the fair value hierarchy. NAV is provided by the fund’s issuer and is based on the fair value of the underlying investments held by the fund less its liabilities. In the event the Plan were to initiate a full redemption of a common collective trust, the fund’s issuer reserves the right to temporarily delay withdrawal from the common collective trust in order to ensure that securities liquidations will be carried out in an orderly business manner. The common collective trusts have no unfunded commitments, other redemption restrictions, or redemption notice periods. The underlying portfolios of the common collective trusts are comprised of a mix of stocks, bonds, commodities, and cash.
One of the common collective trusts, the State Street Government Short Term Investment Fund (“SSBK Govt STIF Fund”), does not file as a direct filing entity with the Department of Labor. The investment strategy of this fund is to provide safety of principal, daily liquidity, and a competitive yield over the long term. The SSBK Govt STIF Fund invests primarily in repurchase agreements and U.S. Treasury obligations.
 
Financial Instruments Measured at Fair Value
 
December 31, 2025
   
Level 1
     
Level 2
     
Total
  
 
  
Mutual funds
   
$
0
 
   
$
0
 
   
$
0
 
Microsoft Common Stock
   
 
5,142,641,059
 
   
 
0
 
   
 
5,142,641,059
 
Separately managed accounts:
         
Publicly-traded stock
   
 
7,574,312,971
 
   
 
0
 
   
 
7,574,312,971
 
Mutual funds
   
 
0
 
   
 
1,791,245,275
 
   
 
1,791,245,275
 
Other
   
 
0
 
   
 
32,187,689
 
   
 
32,187,689
 
Brokerage accounts
   
 
6,477,323,163
 
   
 
125,065,084
 
   
 
6,602,388,247
 
 
     
 
 
     
 
 
  
Total
   
$
 19,194,277,193
 
   
$
 1,948,498,048
 
   
 
21,142,775,241
 
Common collective trusts measured at NAV
         
 
53,174,958,031
 
Separately managed accounts:
         
Common collective trusts measured at NAV
         
 
1,315,532,151
 
        
 
 
  
Total Investments at Fair Value
         
$
75,633,265,423
 
        
 
 
  
December 31, 2024
   
Level 1
     
Level 2
     
Total
  
 
  
Mutual funds
    $ 9,181,148,993      $ 0      $ 9,181,148,993  
Microsoft Common Stock
      5,063,721,519        0        5,063,721,519  
Separately managed accounts:
         
Publicly-traded stock
      5,581,875,657        0        5,581,875,657  
Mutual funds
      0        1,518,134,041        1,518,134,041  
Other
      0        49,048,486        49,048,486  
Brokerage accounts
      4,977,729,263        109,333,085        5,087,062,348  
 
     
 
 
     
 
 
  
Total
    $  24,804,475,432      $  1,676,515,612        26,480,991,044  
Common collective trusts measured at NAV
            38,419,549,176  
Separately managed accounts:
         
Common collective trusts measured at NAV
            457,280,957  
        
 
 
  
Total Investments at Fair Value
          $ 65,357,821,177