Cash, cash equivalents, and marketable equity securities are measured at fair value and classified within Level 1 and Level 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets

Debt securities are measured at fair value and classified within Level 2 in the fair value hierarchy, because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value. For certain marketable debt securities, we have elected the fair value option for which changes in fair value are recorded in OI&E. The fair value option was elected for these securities to align with the unrealized gains and losses from related derivative contracts.


		As of December 31, 2023
	Fair Value Hierarchy	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Fair value changes recorded in other comprehensive income
Time deposits	Level 2	$	2,628	$	0	$	0	$	2,628	$	2,628	$	0
Government bonds	Level 2	38,106		233		(679)		37,660		1,993		35,667
Corporate debt securities	Level 2	22,457		112		(637)		21,932		0		21,932
Mortgage-backed and asset-backed securities	Level 2	17,243		88		(634)		16,697		0		16,697
Total investments with fair value change reflected in other comprehensive income(1)		80,434		433		(1,950)		78,917		4,621		74,296
Fair value adjustments recorded in net income
Money market funds	Level 1							6,480		6,480		0
Current marketable equity securities(2)	Level 1							4,282		0		4,282
Mutual funds	Level 2							311		0		311
Government bonds	Level 2							1,952		347		1,605
Corporate debt securities	Level 2							3,782		91		3,691
Mortgage-backed and asset-backed securities	Level 2							2,683		0		2,683
Total investments with fair value change recorded in net income								19,490		6,918		12,572
Cash								0		12,509		0
Total		$	80,434	$	433	$	(1,950)	$	98,407	$	24,048	$	86,868


		As of September 30, 2024
	Fair Value Hierarchy	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Fair value changes recorded in other comprehensive income
Time deposits	Level 2	$	3,234	$	0	$	0	$	3,234	$	3,090	$	144
Government bonds	Level 2	27,222		458		(93)		27,587		0		27,587
Corporate debt securities	Level 2	18,150		234		(208)		18,176		0		18,176
Mortgage-backed and asset-backed securities	Level 2	14,633		188		(233)		14,588		0		14,588
Total investments with fair value change reflected in other comprehensive income(1)		63,239		880		(534)		63,585		3,090		60,495
Fair value adjustments recorded in net income
Money market funds	Level 1							5,932		5,932		0
Current marketable equity securities(2)	Level 1							4,933		0		4,933
Mutual funds	Level 2							291		0		291
Government bonds	Level 2							1,459		128		1,331
Corporate debt securities	Level 2							3,094		59		3,035
Mortgage-backed and asset-backed securities	Level 2							3,186		0		3,186
Total investments with fair value change recorded in net income								18,895		6,119		12,776
Cash								0		10,750		0
Total		$	63,239	$	880	$	(534)	$	82,480	$	19,959	$	73,271

Our non-marketable equity securities are investments in privately held companies without readily determinable market values. The carrying value of our non-marketable equity securities is adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or impairment. Non-marketable equity securities that have been remeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy. Non-marketable equity securities that have been remeasured due to impairment are classified within Level 3. Our valuation methods include option pricing models, market comparable approach, and common stock equivalent method, which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, expected time to exit, risk free rate, and the rights, and obligations of the securities we hold. These inputs significantly vary based on investment type.

As of September 30, 2024, the carrying value of our non-marketable equity securities was $33.7 billion, of which $13.7 billion were remeasured at fair value during the three months ended September 30, 2024 and were primarily classified within Level 2 of the fair value hierarchy at the time of measurement.

The following tables present fair values and gross unrealized losses recorded to AOCI, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):


	As of December 31, 2023
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	1,456	$	(22)	$	13,897	$	(657)	$	15,353	$	(679)
Corporate debt securities	827		(5)		15,367		(592)		16,194		(597)
Mortgage-backed and asset-backed securities	2,945		(26)		7,916		(608)		10,861		(634)
Total	$	5,228	$	(53)	$	37,180	$	(1,857)	$	42,408	$	(1,910)


	As of September 30, 2024
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	2,636	$	(18)	$	2,920	$	(75)	$	5,556	$	(93)
Corporate debt securities	570		(1)		7,899		(193)		8,469		(194)
Mortgage-backed and asset-backed securities	142		0		4,312		(233)		4,454		(233)
Total	$	3,348	$	(19)	$	15,131	$	(501)	$	18,479	$	(520)

We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method. The following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in millions):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2024		2023		2024
Unrealized gain (loss) on fair value option debt securities	$	(86)	$	262	$	35	$	193
Gross realized gain on debt securities	8		196		93		426
Gross realized loss on debt securities	(402)		(316)		(1,197)		(1,252)
(Increase) decrease in allowance for credit losses	(23)		18		(31)		21
Total gain (loss) on debt securities recognized in other income (expense), net	$	(503)	$	160	$	(1,100)	$	(612)

The carrying value of equity securities is measured as the total initial cost plus the cumulative net gain (loss). Gains and losses, including impairments, are included as a component of OI&E in the Consolidated Statements of Income. See Note 6 for further details on OI&E. Certain of our non-marketable equity securities include our investments in variable interest entities (VIE) where we are not the primary beneficiary. See Note 4 for further details on variable interest entities.

The carrying values for marketable and non-marketable equity securities are summarized below (in millions):


	As of December 31, 2023						As of September 30, 2024
	Marketable Equity Securities		Non-Marketable Equity Securities		Total		Marketable Equity Securities		Non-Marketable Equity Securities		Total
Total initial cost	$	5,418	$	17,616	$	23,034	$	5,021	$	19,770	$	24,791
Cumulative net gain (loss)(1)	555		11,150		11,705		456		13,894		14,350
Carrying value	$	5,973	$	28,766	$	34,739	$	5,477	$	33,664	$	39,141

(1)Non-marketable equity securities cumulative net gain (loss) is comprised of $18.1 billion gains and $6.9 billion losses (including impairments) as of December 31, 2023 and $22.4 billion gains and $8.5 billion losses (including impairments) as of September 30, 2024.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2024		2023		2024
Realized net gain (loss) on equity securities sold during the period	$	42	$	41	$	348	$	216
Unrealized net gain (loss) on marketable equity securities	(224)		318		136		96
Unrealized net gain (loss) on non-marketable equity securities(1)	(184)		1,462		(678)		3,038
Total gain (loss) on equity securities in other income (expense), net	$	(366)	$	1,821	$	(194)	$	3,350

(1)Unrealized gain (loss) on non-marketable equity securities accounted for under the measurement alternative is comprised of $599 million and $1.9 billion of upward adjustments and $783 million and $412 million of downward adjustments (including impairments) for the three months ended September 30, 2023 and 2024, respectively, and $1.6 billion and $5.0 billion of upward adjustments and $2.3 billion and $2.0 billion of downward adjustments (including impairments) for the nine months ended September 30, 2023 and 2024, respectively.

In the table above, realized net gain (loss) on equity securities sold during the period reflects the difference between the sale proceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later.

Cumulative net gains (losses) on equity securities sold during the period, which is summarized in the following table (in millions), represents the total net gains (losses) recognized after the initial purchase date of the equity security sold during the period. While these net gains (losses) may have been reflected in periods prior to the period of sale, we believe they are important supplemental information as they reflect the economic net gains (losses) on the securities sold during the period. Cumulative net gains (losses) are calculated as the difference between the sale price and the initial purchase price for the equity security sold during the period.


	Equity Securities Sold
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2024		2023		2024
Total sale price	$	736	$	540	$	1,475	$	2,213
Total initial cost	549		577		916		1,541
Cumulative net gains (losses)	$	187	$	(37)	$	559	$	672

As of December 31, 2023 and September 30, 2024, equity securities accounted for under the equity method had a carrying value of approximately $1.7 billion and $2.0 billion, respectively. Our share of gains and losses, including impairments, are included as a component of OI&E, in the Consolidated Statements of Income. See Note 6 for further details on OI&E. Certain of our equity method securities include our investments in VIEs where we are not the primary beneficiary. See Note 4 for further details on VIEs.

As of December 31, 2023 and September 30, 2024, we had investments in convertible notes of $921 million and $2.8 billion, respectively, majority of which are convertible notes held for investment. Our convertible notes held for investment are recorded at amortized cost which includes unpaid principal balances, deferred origination costs, and any related discount or premium, net of allowances for credit losses, and are included within other non-current assets on our Consolidated Balance Sheets.

We use derivative instruments to manage risks relating to our ongoing business operations. The primary risk managed is foreign exchange risk. We use foreign currency contracts to reduce the risk that our cash flows, earnings, and investment in foreign subsidiaries will be adversely affected by foreign currency exchange rate fluctuations. We also enter into derivative instruments to partially offset our exposure to other risks and enhance investment returns.

We recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify the derivatives primarily within Level 2 in the fair value hierarchy. We present our collar contracts (an option strategy comprised of a combination of purchased and written options) at net fair values and present all other derivatives at gross fair values. The accounting treatment for derivatives is based on the intended use and hedge designation.

We designate foreign currency forward and option contracts (including collars) as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the United States (U.S.) dollar. These contracts have maturities of 24 months or less.

Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and subsequently reclassified to revenue when the hedged item is recognized in earnings. We exclude forward points and time value from our assessment of hedge effectiveness and amortize them on a straight-line basis over the life of the hedging instrument in revenues. The difference between fair value changes of the excluded component and the amount amortized to revenues is recorded in AOCI.

We designate foreign currency forward contracts as fair value hedges to hedge foreign currency risks for our marketable securities denominated in currencies other than the U.S. dollar. Fair value hedge amounts included in the assessment of hedge effectiveness are recognized in OI&E, along with the offsetting gains and losses of the related hedged items. We exclude forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in OI&E.

We designate foreign currency forward contracts as net investment hedges to hedge the foreign currency risks related to our investment in foreign subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI along with the foreign currency translation adjustment. We exclude forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in OI&E.

We enter into foreign currency forward and option contracts that are not designated as hedging instruments to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. Gains and losses on these derivatives that are not designated as accounting hedges are primarily recorded in OI&E along with the foreign currency gains and losses on monetary assets and liabilities.

We also use derivatives not designated as hedging instruments to manage risks relating to interest rates, commodity prices, and credit exposures, and to enhance investment returns. From time to time, we enter into derivatives to hedge the market price risk on certain of our marketable equity securities. Gains and losses arising from other derivatives are primarily reflected within the “other” component of OI&E. See Note 6 for further details.

The gross notional amounts of outstanding derivative instruments were as follows (in millions):


	As of December 31, 2023		As of September 30, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges	$	18,039	$	22,693
Fair value hedges	$	2,065	$	1,714
Net investment hedges	$	9,472	$	7,047
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	39,722	$	49,303
Other contracts	$	10,818	$	16,756

The fair values of outstanding derivative instruments were as follows (in millions):


	As of December 31, 2023				As of September 30, 2024
	Assets(1)		Liabilities(2)		Assets(1)		Liabilities(2)
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	205	$	242	$	8	$	587

Derivatives not designated as hedging instruments:
Foreign exchange contracts	134		156		186		154
Other contracts	114		47		451		29
Total derivatives not designated as hedging instruments	248		203		637		183
Total	$	453	$	445	$	645	$	770

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized in other comprehensive income (OCI) are summarized below (in millions):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2024		2023		2024
Derivatives in cash flow hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	652	$	(738)	$	591	$	(306)
Amount excluded from the assessment of effectiveness	16		(103)		143		(52)

Derivatives in net investment hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	336		(424)		62		(222)
Total	$	1,004	$	(1,265)	$	796	$	(580)

The tables below present the gains (losses) of our derivatives included in the Consolidated Statements of Income: (in millions):


	Three Months Ended September 30,
	2023				2024
	Revenues		Other income (expense), net		Revenues		Other income (expense), net
Total amounts included in the Consolidated Statements of Income	$	76,693	$	(146)	$	88,268	$	3,185

Effect of cash flow hedges:
Foreign exchange contracts
Amount reclassified from AOCI to income	$	(15)	$	0	$	(6)	$	0
Amount excluded from the assessment of effectiveness (amortized)	14		0		23		0
Effect of fair value hedges:
Foreign exchange contracts
Hedged items	0		(48)		0		69
Derivatives designated as hedging instruments	0		48		0		(69)
Amount excluded from the assessment of effectiveness	0		2		0		4
Effect of net investment hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		13		0		47
Effect of non designated hedges:
Foreign exchange contracts	0		(340)		0		(52)
Other contracts	0		83		0		(32)
Total gains (losses)	$	(1)	$	(242)	$	17	$	(33)


	Nine Months Ended September 30,
	2023				2024
	Revenues		Other income (expense), net		Revenues		Other income (expense), net
Total amounts included in the Consolidated Statements of Income	$	221,084	$	709	$	253,549	$	6,154

Effect of cash flow hedges:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	$	71	$	0	$	174	$	0
Amount excluded from the assessment of effectiveness (amortized)	16		0		17		0
Effect of fair value hedges:
Foreign exchange contracts
Hedged items	0		6		0		44
Derivatives designated as hedging instruments	0		(6)		0		(45)
Amount excluded from the assessment of effectiveness	0		12		0		10
Effect of net investment hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		136		0		114
Effect of non designated hedges:
Foreign exchange contracts	0		(186)		0		(53)
Other contracts	0		82		0		70
Total gains (losses)	$	87	$	44	$	191	$	140

We enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cash collateral received related to derivative instruments under our collateral security arrangements are included in other current assets with a corresponding liability. Cash and non-cash collateral pledged related to derivative instruments under our collateral security arrangements are included in other current assets.


	As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	535	$	(82)	$	453	$	(213)	$	(75)	$	165
Derivatives liabilities	$	527	$	(82)	$	445	$	(213)	$	(16)	$	216


	As of September 30, 2024
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	707	$	(62)	$	645	$	(198)	$	(3)	$	444
Derivatives liabilities	$	832	$	(62)	$	770	$	(198)	$	(10)	$	562