Other assets

3 Months Ended

Mar. 31, 2020

The following table provides the components of other assets presented on the consolidated balance sheet.



Other assets	March 31, 2020			Dec. 31, 2019
(in millions)	March 31, 2020			Dec. 31, 2019
Fails to deliver	$	8,200	(a)	$	1,671
Corporate/bank-owned life insurance	5,240			5,219
Accounts receivable	4,649			3,802
Software	1,678			1,590
Prepaid pension assets	1,502			1,464
Renewable energy investments	1,119			1,144
Equity in a joint venture and other investments	1,091			1,102
Qualified affordable housing project investments	993			1,024
Prepaid expense	515			491
Federal Reserve Bank stock	466			466
Fair value of hedging derivatives	187			21
Seed capital	141			184
Income taxes receivable	47			388
Other (b)	1,618			1,655
Total other assets	$	27,446		$	20,221


(a)	The increase at March 31, 2020 primarily reflects higher trade volumes in the current macroeconomic environment.

(b)

At March 31, 2020 and Dec. 31, 2019, other assets include $20 million and $22 million, respectively, of Federal Home Loan Bank stock, at cost.

Non-readily marketable equity securities

Non-readily marketable equity securities do not have readily determinable fair values. These investments are valued using a measurement alternative where the investments are carried at cost, less any impairment, and plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The observable price changes are recorded in investment and other income on the consolidated income statement. Our non-readily marketable equity securities totaled $101 million at March 31, 2020 and $61 million at Dec. 31, 2019 and are included in equity in a joint venture and other investments in the table above.

The following table presents the adjustments on the non-readily marketable equity securities.



Non-readily marketable equity securities								Life-to-date
(in millions)	1Q20		4Q19			1Q19		Life-to-date
Upward adjustments	$	4	$	1		$	—	$	36
Downward adjustments	—		(2		)	—		(4		)
Net adjustments	$	4	$	(1	)	$	—	$	32

Qualified affordable housing project investments

We invest in affordable housing projects primarily to satisfy the Company’s requirements under the Community Reinvestment Act. Our total investment in qualified affordable housing projects totaled $1.0 billion at both March 31, 2020 and Dec. 31, 2019.

Commitments to fund future investments in qualified affordable housing projects totaled $390 million at March 31, 2020 and $422 million at Dec. 31, 2019 and are recorded in other liabilities. A summary of the commitments to fund future investments is as follows: 2020 – $114 million; 2021 – $181 million; 2022 – $83 million; 2023 – $6 million; 2024 – $2 million; and 2025 and thereafter – $4 million.

Tax credits and other tax benefits recognized were $38 million in the first quarter of 2020, $31 million in the fourth quarter of 2019 and $39 million in the first quarter of 2019.

Amortization expense included in the provision for income taxes was $31 million in the first quarter of 2020, $24 million in the fourth quarter of 2019 and $32 million in the first quarter of 2019.

Investments valued using net asset value (“NAV”) per share

In our Investment Management business, we make seed capital investments in certain funds we manage. We also hold private equity investments, specifically small business investment companies (“SBICs”), which are compliant with the Volcker Rule, and certain other corporate investments. Seed capital, private equity and other corporate investments are included in other assets on the consolidated balance sheet. The fair value of certain of these investments was estimated using the NAV per share for our ownership interest in the funds.

The table below presents information on our investments valued using NAV.



Investments valued using NAV	March 31, 2020					Dec. 31, 2019
(in millions)	Fair value		Unfunded commitments			Fair value		Unfunded commitments
Seed capital (a)	$	51		$	—	$	59		$	—
Private equity investments (SBICs) (b)	80			52		89			55
Other (c)	27			—		33			—
Total	$	158		$	52	$	181		$	55


(a)	Primarily includes leveraged loans and structured credit funds, which are generally not redeemable. Distributions from such investments will be received as the underlying investments in the funds, which have a life of six years, are liquidated.


(b)	Private equity investments include Volcker Rule-compliant investments in SBICs that invest in various sectors of the economy. Private equity investments do not have redemption rights. Distributions from such investments will be received as the underlying investments in the private equity investments, which have a life of 10 years, are liquidated.


(c)	Primarily includes investments in funds that relate to deferred compensation arrangements with employees. Investments in funds can be redeemed on a quarterly basis with redemption notice periods of up to 95 days.