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FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
FINANCIAL INSTRUMENTS
NOTE 21. FINANCIAL INSTRUMENTS. 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, 2024December 31, 2023
Carrying
amount (net)		Estimated
fair value		Carrying
amount (net)		Estimated
fair value
AssetsLoans and other receivables$2,453 $2,333 $2,438 $2,379 
LiabilitiesBorrowings (Note 11)$20,525 $20,037 $20,965 $20,689 
Investment contracts (Note 13)1,486 1,547 1,535 1,616 

Assets and liabilities that are reflected in the accompanying financial statements at fair value are not included in the above disclosures; such items include cash and equivalents, investment securities and derivative financial instruments.

DERIVATIVES AND HEDGING. Our policy requires that derivatives are used solely for managing risks and not for speculative purposes. We use derivatives to manage currency risks related to foreign exchange, and interest rate and currency risk between financial assets and liabilities, and certain equity investments and commodity prices.

FAIR VALUE OF DERIVATIVESMarch 31, 2024December 31, 2023
Gross NotionalAll other current assetsAll other current liabilitiesGross NotionalAll other current assetsAll other current liabilities
Qualifying currency exchange contracts$6,064 $161 $81 $6,648 $156 $91 
Non-qualifying currency exchange contracts and other48,981 717 477 50,563 794 580 
Gross derivatives$55,045 $878 $558 $57,211 $950 $671 
Netting and credit adjustments$(434)$(432)$(512)$(510)
Net derivatives in statement of financial position$445 $126 $437 $161 

FAIR VALUE HEDGES. As of March 31, 2024, all fair value hedges were terminated. Gains (losses) associated with the terminated hedging relationships will continue to amortize into interest expense until the hedged borrowings mature. The cumulative amount of hedging adjustments of $1,130 million (all on discontinued hedging relationships) was included in the carrying amount of the previously hedged liability of $8,803 million. At March 31, 2023, the cumulative amount of hedging adjustments of $1,226 million (all on discontinued hedging relationships) was included in the carrying amount of the previously hedged liability of $8,817 million. The cumulative amount of hedging adjustments was primarily recorded in long-term borrowings.

CASH FLOW HEDGES AND NET INVESTMENT HEDGESThree months ended March 31
20242023
Cash flow hedges(a)$6 $28 
Net investment hedges(b)84 (62)
(a) Primarily related to currency exchange contracts.
(b) The carrying value of foreign currency debt designated as net investment hedges was $4,655 million and $3,398 million as of March 31, 2024 and 2023, respectively. The total reclassified from AOCI into earnings was zero and zero for the years ended March 31, 2024 and 2023, respectively.

Changes in the fair value of cash flow hedges are recorded in AOCI and recorded in earnings in the period in which the hedged transaction occurs. The total amount in AOCI related to cash flow hedges of forecasted transactions was a $25 million loss as of March 31, 2024. We expect to reclassify $43 million of loss to earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. As of March 31, 2024, the maximum term of derivative instruments that hedge forecasted transactions was approximately 12 years.

The table below presents the effects of hedges and resulting gains (losses) of our derivative financial instruments in the Statement of Earnings (Loss):

Three months ended March 31, 2024Three months ended March 31, 2023
RevenuesInterest ExpenseSG&AOther(a)RevenuesInterest ExpenseSG&AOther(a)
$16,053 $278 $2,269 $12,729 $14,486 $269 $2,142 $16,810 
Cash flow hedges$1 $(2)$— $(4)$1 $(2)$— $(2)
Non-hedging derivatives (b)$— $— $43 $(38)$2 $— $115 $(58)
(a) Amounts are inclusive of cost of sales and other income (loss).
(b) SG&A was primarily driven by hedges of deferred incentive compensation, and hedges of remeasurement of monetary assets and liabilities.

COUNTERPARTY CREDIT RISK. Our exposures to counterparties were $381 million and $374 million at March 31, 2024 and December 31, 2023, respectively. Counterparties' exposures to our derivative liability were $80 million and $120 million at March 31, 2024 and December 31, 2023, respectively.