Our liabilities consist mainly of fixed and variable rate debt, denominated in U.S. dollars and various other currencies, which we issue in the global capital markets, while our assets consist primarily of U.S. dollar denominated, fixed rate receivables. We enter into interest rate swaps, interest rate floors, and foreign currency swaps to economically hedge the interest rate and foreign currency risks that result from the different characteristics of our assets and liabilities. Our use of derivative transactions is intended to reduce long-term fluctuations in the fair value of assets and liabilities caused by market movements. All of our derivative activities are authorized and monitored by our management and our Asset-Liability Committee which provides a framework for financial controls and governance to manage market risk.

We categorize derivatives as those designated for hedge accounting (“hedge accounting derivatives”) and those that are not designated for hedge accounting (“non-hedge accounting derivatives”). At the inception of a derivative contract, we may elect to designate a derivative as a hedge accounting derivative if certain criteria are met. As of September 30, 2018, we no longer have any hedge accounting derivatives.

All derivative instruments are recorded on the balance sheet at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle asset and liability positions and offset cash collateral with the same counterparty on a net basis. Changes in the fair value of our derivative instruments are recognized as a component of Interest expense in our Consolidated Statements of Income. The derivative instruments are included as a component of Other assets or Other liabilities in our Consolidated Balance Sheets.

The accounting guidance permits the net presentation on our Consolidated Balance Sheets of derivative receivables and derivative payables with the same counterparty and the related cash collateral when a legally enforceable master netting agreement exists. When we meet this condition, we elect to present such balances on a net basis.

Our International Swaps and Derivatives Association (“ISDA”) Master Agreements are our master netting agreements which permit multiple transactions to be cancelled and settled with a single net balance paid to either party. The master netting agreements also contain reciprocal collateral agreements which require the transfer of cash collateral to the party in a net asset position across all transactions. Our collateral agreements with substantially all our counterparties include a zero threshold, full collateralization arrangement. Although we have daily valuation and collateral exchange arrangements with all of our counterparties, due to the time required to move collateral, there may be a delay of up to one day between the exchange of collateral and the valuation of our derivatives. We would not be required to post additional collateral to the counterparties with whom we were in a net liability position at March 31, 2020, if our credit ratings were to decline, since we fully collateralize without regard to credit ratings with these counterparties. In addition, as our collateral agreements include legal right of offset provisions, collateral amounts are netted against derivative assets or derivative liabilities, the net amount of which is included in Other assets or Other liabilities in our Consolidated Balance Sheets.

The following tables show the financial statement line item and amount of our derivative assets and liabilities that are reported in our Consolidated Balance Sheets:

	March 31, 2020					March 31, 2019
			Fair					Fair
	Notional		value			Notional		value
Other assets:
Interest rate swaps	$	30,362	$	1,410		$	49,254	$	472
Foreign currency swaps		488		27			2,771		72
Total	$	30,850	$	1,437		$	52,025	$	544

Counterparty netting				(966	)				(441	)
Collateral held				(420	)				(42	)
Carrying value of derivative contracts – Other assets			$	51				$	61

Other liabilities:
Interest rate swaps	$	69,079	$	1,826		$	57,593	$	622
Foreign currency swaps		13,181		1,290			9,796		785
Total	$	82,260	$	3,116		$	67,389	$	1,407

Counterparty netting				(966	)				(441	)
Collateral posted				(2,105	)				(940	)
Carrying value of derivative contracts – Other liabilities			$	45				$	26

As of March 31, 2020 and 2019, we held excess collateral of $10 million and $2 million, respectively, which we did not use to offset derivative assets and was recorded in Other liabilities in our Consolidated Balance Sheets. As of March 31, 2020 and 2019, we posted excess collateral of $1 million and $17 million, respectively, which we did not use to offset derivative liabilities and was recorded in Other assets in our Consolidated Balance Sheets.

The following table summarizes the components of interest expense, including the location and amount of gains and losses on derivative instruments and related hedged items, as reported in our Consolidated Statements of Income:

	Years ended March 31,
	2020			2019			2018
Interest expense on debt	$	2,488		$	2,559		$	1,970
Interest expense (income) on derivatives		180			(53	)		(67	)
Interest expense on debt and derivatives		2,668			2,506			1,903

(Gains) losses on debt denominated in foreign currencies		(703	)		(1,078	)		1,344
Losses (gains) on foreign currency swaps		650			1,015			(1,306	)
Losses (gains) on U.S. dollar interest rate swaps		219			304			(90	)
Total interest expense	$	2,834		$	2,747		$	1,851

Interest expense on debt and derivatives represents net interest settlements and changes in accruals. Gains and losses on derivatives and debt denominated in foreign currencies exclude net interest settlements and changes in accruals. Cash flows associated with derivatives are reported in Net cash provided by operating activities in our Consolidated Statements of Cash Flows.