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FINANCIAL INSTRUMENTS (Tables)
 3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Estimated Fair Value of Assets and Liabilities
The following table provides information about assets and liabilities not carried at fair value and excludes finance leases, equity securities without readily determinable fair value and non-financial assets and liabilities. Substantially all of these assets are considered to be Level 3 and the vast majority of our liabilities’ fair value are considered Level 2.

March 31, 2020
 
December 31, 2019
(In millions)
Carrying
amount
(net)

Estimated
fair value

 
Carrying
amount
(net)

Estimated
fair value




 


Assets


 


Loans and other receivables
$
3,912

$
3,777

 
$
4,113

$
4,208

Liabilities


 


Borrowings (Note 11)
85,154

85,033

 
90,882

97,754

Investment contracts (Note 12)
2,169

2,485

 
2,191

2,588
Fair Value of Derivative Assets
FAIR VALUE OF DERIVATIVES
March 31, 2020
 
December 31, 2019
(In millions)
Gross Notional

All other assets

All other liabilities

 
Gross Notional

All other assets

All other liabilities

 
 
 
 
 
 
 
 
Interest rate contracts
$
23,617

$
2,191

$
9

 
$
23,918

$
1,636

$
11

Currency exchange contracts
7,307

170

277

 
7,044

99

46

Derivatives accounted for as hedges
$
30,924

$
2,361

$
287

 
$
30,961

$
1,734

$
57

 
 
 
 
 
 
 
 
Interest rate contracts
$
2,447

$
29

$
7

 
$
3,185

$
18

$
12

Currency exchange contracts
66,240

1,105

1,477

 
62,165

697

744

Other contracts
1,598

5

103

 
1,706

123

40

Derivatives not accounted for as hedges
$
70,285

$
1,139

$
1,587

 
$
67,056

$
838

$
796

 
 
 
 
 
 
 
 
Gross derivatives
$
101,209

$
3,500

$
1,874

 
$
98,018

$
2,572

$
853

 
 
 
 
 
 
 
 
Netting and credit adjustments
 
$
(1,145
)
$
(1,155
)
 
 
$
(546
)
$
(546
)
Cash collateral adjustments
 
(1,297
)
(198
)
 
 
(1,286
)
(105
)
Net derivatives recognized in statement of financial position
 
$
1,058

$
520

 
 
$
740

$
202

 
 
 
 
 
 
 
 
Net accrued interest
 
$
71

$
1

 
 
$
182

$
1

Securities held as collateral
 
(693
)
—

 
 
(469
)
—

Net amount
 
$
436

$
521

 
 
$
452

$
203
Fair Value of Derivative Liabilities
FAIR VALUE OF DERIVATIVES
March 31, 2020
 
December 31, 2019
(In millions)
Gross Notional

All other assets

All other liabilities

 
Gross Notional

All other assets

All other liabilities

 
 
 
 
 
 
 
 
Interest rate contracts
$
23,617

$
2,191

$
9

 
$
23,918

$
1,636

$
11

Currency exchange contracts
7,307

170

277

 
7,044

99

46

Derivatives accounted for as hedges
$
30,924

$
2,361

$
287

 
$
30,961

$
1,734

$
57

 
 
 
 
 
 
 
 
Interest rate contracts
$
2,447

$
29

$
7

 
$
3,185

$
18

$
12

Currency exchange contracts
66,240

1,105

1,477

 
62,165

697

744

Other contracts
1,598

5

103

 
1,706

123

40

Derivatives not accounted for as hedges
$
70,285

$
1,139

$
1,587

 
$
67,056

$
838

$
796

 
 
 
 
 
 
 
 
Gross derivatives
$
101,209

$
3,500

$
1,874

 
$
98,018

$
2,572

$
853

 
 
 
 
 
 
 
 
Netting and credit adjustments
 
$
(1,145
)
$
(1,155
)
 
 
$
(546
)
$
(546
)
Cash collateral adjustments
 
(1,297
)
(198
)
 
 
(1,286
)
(105
)
Net derivatives recognized in statement of financial position
 
$
1,058

$
520

 
 
$
740

$
202

 
 
 
 
 
 
 
 
Net accrued interest
 
$
71

$
1

 
 
$
182

$
1

Securities held as collateral
 
(693
)
—

 
 
(469
)
—

Net amount
 
$
436

$
521

 
 
$
452

$
203
Effects of Derivatives on Earnings
The table below presents the effect of our derivative financial instruments in the consolidated Statement of Earnings:
 
Three months ended March 31, 2020
 
Three months ended March 31, 2019
(In millions)
Revenues
Cost of sales
Interest Expense
SG&A
Other Income
 
Revenues
Cost of sales
Interest Expense
SG&A
Other Income
 
 
 
 
 
 
 
 
 
 
 
 
Total amounts presented in the consolidated Statement of Earnings
$
20,524

$
15,695

$
794

$
3,065

$
6,869

 
$
22,202

$
16,208

$
1,065

$
3,402

$
847

 
 
 
 
 
 
 
 
 
 
 
 
Total effect of cash flow hedges
$
(21
)
$
(25
)
$
(10
)
$
(3
)
$
—

 
$
20

$
(9
)
$
(10
)
$
(1
)
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Hedged items
 
 
$
(2,480
)
 
 
 
 
 
$
(527
)
 
 
Derivatives designated as hedging instruments
 
 
2,511

 
 
 
 
 
515

 
 
Total effect of fair value hedges
 
 
$
31

 
 
 
 
 
$
(11
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
(23
)
$
—

$
(9
)
$
—

$
—

 
$
(4
)
$
—

$
(16
)
$
—

$
—

Currency exchange contracts
(521
)
13

—

54

11

 
390

9

—

(45
)
3

Other
—

—

—

(160
)
(22
)
 
—

—

96

—

13

Total effect of derivatives not designated as hedges
$
(545
)
$
13

$
(9
)
$
(106
)
$
(12
)
 
$
386

$
9

$
80

$
(45
)
$
16