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Fair value option
6 Months Ended
Jun. 30, 2017
Fair Value Disclosures [Abstract]  
Fair value option
Fair value option

We elected fair value as an alternative measurement for selected financial assets and financial liabilities.

The following table presents the assets and liabilities, by type, of consolidated investment management funds recorded at fair value.

Assets and liabilities of consolidated investment management funds, at fair value
 
June 30, 2017

Dec. 31, 2016

(in millions)
Assets of consolidated investment management funds:
 
 
Trading assets
$
537

$
979

Other assets
165

252

Total assets of consolidated investment management funds
$
702

$
1,231

Liabilities of consolidated investment management funds:
 
 
Trading liabilities
$

$
282

Other liabilities
22

33

Total liabilities of consolidated investment management funds
$
22

$
315




BNY Mellon values the assets and liabilities of its consolidated asset management funds using quoted prices for identical assets or liabilities in active markets or observable inputs such as quoted prices for similar assets or liabilities. Quoted prices for either identical or similar assets or liabilities in inactive markets may also be used. Accordingly, fair value best reflects the interests BNY Mellon holds in the economic performance of the consolidated asset management funds. Changes in the value of the assets and liabilities are recorded in the income statement as investment income of consolidated investment management funds and in the interest of investment management fund note holders, respectively.

We have elected the fair value option on $240 million of long-term debt. The fair value of this long-term debt was $368 million at June 30, 2017 and $363 million at Dec. 31, 2016. The long-term debt is valued using observable market inputs and is included in Level 2 of the valuation hierarchy.

The following table presents the changes in fair value of long-term debt and certain loans for which we elected the fair value option that we previously held in 2016, and the location of the changes in the income statement.

Impact of changes in fair value in the income statement (a)
(in millions)
2Q17

1Q17

2Q16

YTD17

YTD16

Loans:
 
 
 
 
 
Investment and other income
$

$

$
5

$

$
14

Long-term debt:
 
 
 
 
 
Foreign exchange and other trading revenue
$
(4
)
$
(1
)
$
(6
)
$
(5
)
$
(19
)

(a)
The changes in fair value of the loans and long-term debt are approximately offset by economic hedges included in foreign exchange and other trading revenue.