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FINANCIAL INSTRUMENTS (Tables)
 12 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of the impact of derivatives on comprehensive income
The following table summarizes the impact of the company’s derivatives instruments on comprehensive income for fiscal years ended September 30 (in millions): 

 
Location of
Gain (Loss)
 
2019
 
2018
 
2017
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Amount of gain (loss) recognized in AOCI
AOCI
 
$
19

 
$
3

 
$
(1
)
Amount of gain (loss) reclassified from AOCI
into income
Cost of Sales
 
4

 
(1
)
 
1

Derivatives not designated as hedging instruments:
Amount of gain (loss) recognized in income
Cost of Sales
 
—

 
(2
)
 
1

Derivatives not designated as hedging instruments:
Amount of gain (loss) recognized in income
Other Income (expense)
 
1

 
2

 
—
Summary of fair value of financial instruments
Fair values of financial instruments are summarized as follows (in millions): 
 
September 30,
2019
 
September 30,
2018
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
Cash and cash equivalents
$
108

 
$
108

 
$
115

 
$
115

Short-term debt
41

 
60

 
94

 
116

Long-term debt
902

 
953

 
730

 
776

Foreign exchange forward contracts (other assets)
—

 
—

 
2

 
2

Cross-currency swap (others assets)
10

 
10

 
6

 
6

Cross-currency swaps (other liabilities)
5

 
5

 
—

 
—
Schedule of offsetting of derivative assets and liabilities
The following table reflects the offsetting of derivative assets and liabilities (in millions):

 
September 30, 2019
 
September 30, 2018
 
Gross
Amounts Recognized
 
Gross Amounts
Offset
 
Net Amounts
Reported
 
Gross
Amounts Recognized
 
Gross Amounts
Offset
 
Net Amounts
Reported
Derivative Asset
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forward contract
—

 
—

 
—

 
2

 
—

 
2

Cross-currency swaps
10

 
—

 
10

 
6

 
—

 
6

Derivative Liabilities
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forward contract
—

 
—

 
—

 
—

 
—

 
—

Cross-currency swaps
5

 
—

 
5

 
—

 
—

 
—
Fair value of financial instruments by the valuation hierarchy
Fair value of financial instruments by the valuation hierarchy at September 30, 2019 is as follows (in millions):
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents
$
108

 
$
—

 
$
—

Foreign exchange forward contracts (asset)
—

 
—

 
—

Foreign exchange forward contracts (liability)
—

 
—

 
—

Foreign currency option/collar contracts (other assets)
—

 
—

 
—

Cross-currency swaps (other assets)
—

 
10

 
—

Cross-currency swaps (other liabilities)
—

 
5

 
—




Fair value of financial instruments by the valuation hierarchy at September 30, 2018 is as follows (in millions):
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents
$
115

 
$
—

 
$
—

Foreign exchange forward contracts (asset)
—

 
2

 
—

Foreign exchange forward contracts (liability)
—

 
—

 
—

Foreign currency option/collar contracts (other assets)
—

 
—

 
—

Cross-currency swap (other assets)
—

 
6

 
—
Reconciliation of changes in fair value of Level 3 financial assets and liabilities The tables below provide a reconciliation of changes in fair value of the Level 3 financial assets and liabilities measured at fair value in the Consolidated Balance Sheet for the twelve months ended September 30, 2019 and September 30, 2018, respectively. No transfers of assets between any of the Levels occurred during these periods.
Twelve months ended September 30, 2019 (in millions)
 
Short-term foreign currency option contracts (asset)
 
Long-term foreign currency option contracts (asset)
 
Total
Fair Value as of September 30, 2018
 
$
—

 
$
—

 
$
—

Total unrealized gains (losses):
 
 
 
 
 
 
Included in other income
 
(1
)
 
—

 
(1
)
Included in cost of sales
 
1

 
—

 
1

Total realized gains (losses):
 
 
 
 
 
 
Included in other income
 
1

 
—

 
1

Included in cost of sales
 
—

 
—

 
—

Purchases, issuances, sales and settlements:
 
 
 
 
 
 
Purchases
 
—

 
—

 
—

Settlements
 
(1
)
 
—

 
(1
)
Transfer in and / or out of Level 3 (1)
 
—

 
—

 
—

Reclass between short-term and long-term
 
—

 
—

 
—

Fair Value as of September 30, 2019
 
$
—

 
$
—

 
$
—

(1) Transfers as of the last day of the reporting period
Twelve months ended September 30, 2018 (in millions)
 
Short-term foreign currency option/collar contracts (asset)
 
Long-term foreign currency option/collar contracts (asset)
 
Total
Fair Value as of September 30, 2017
 
$
2

 
$
1

 
$
3

Total unrealized gains (losses):
 
 
 
 
 
 
Included in other income
 
—

 
—

 
—

Included in cost of sales
 
(1
)
 
(1
)
 
(2
)
Total realized gains (losses):
 
 
 
 
 
 
Included in other income
 
1

 
—

 
1

Included in cost of sales
 
—

 
—

 
—

Purchases, issuances, sales and settlements:
 
 
 
 
 
 
Purchases
 
—

 
—

 
—

Settlements
 
(2
)
 
—

 
(2
)
Transfer in and / or out of Level 3 (1)
 
—

 
—

 
—

Reclass between short-term and long-term
 
—

 
—

 
—

Fair Value as of September 30, 2018
 
$
—

 
$
—

 
$
—

(1) Transfers as of the last day of the reporting period