| Fair Value Measurements |
FAIR VALUE MEASUREMENTS For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies. The following tables present our assets and liabilities measured at fair value on a recurring basis. Recurring Fair Value Measurements | | | | | | | | | | | | | | | | | At December 31, 2019 ($ in millions) | Level 1 |
| | Level 2 |
| | Level 3 |
| | Total(a) |
| | | | | | | | | Assets | | | | | | | | Debt securities | | | | | | | | U.S. government and federal agency | $ | — |
| | $ | 2,469 |
| | $ | — |
| | $ | 2,469 |
| State and municipal | — |
| | — |
| | 45 |
| | 45 |
| Residential mortgage-backed | — |
| | 1,026 |
| | — |
| | 1,026 |
| Asset-backed | — |
| | 2,371 |
| | — |
| | 2,371 |
| Other assets(b) | 15 |
| | — |
| | 21 |
| | 36 |
| Total | $ | 15 |
| | $ | 5,866 |
| | $ | 66 |
| | $ | 5,947 |
| | | | | | | | | Liabilities | | | | | | | | Contingent consideration | — |
| | — |
| | 13 |
| | 13 |
| Total | $ | — |
| | $ | — |
| | $ | 13 |
| | $ | 13 |
| | | | | | | | | At December 31, 2018 ($ in millions) | | | | | | | | | | | | | | | | Assets | | | | | | | | Debt securities | | | | | | | | U.S. government and federal agency | $ | — |
| | $ | 2,888 |
| | $ | — |
| | $ | 2,888 |
| State and municipal | — |
| | — |
| | 48 |
| | 48 |
| Residential mortgage-backed | — |
| | 1,139 |
| | — |
| | 1,139 |
| Asset-backed | — |
| | 1,985 |
| | — |
| | 1,985 |
| U.S. corporate debt | — |
| | — |
| | 2 |
| | 2 |
| Other assets(b) | 15 |
| | — |
| | 13 |
| | 28 |
| Total | $ | 15 |
| | $ | 6,012 |
| | $ | 63 |
| | $ | 6,090 |
| | | | | | | | | Liabilities | | | | | | | | Contingent consideration | — |
| | — |
| | 26 |
| | 26 |
| Total | $ | — |
| | $ | — |
| | $ | 26 |
| | $ | 26 |
|
_______________________ | | (a) | For the years ended December 31, 2019 and 2018, there were no securities transferred between levels. |
| | (b) | Other assets primarily relate to equity investments measured at fair value. |
Level 3 Fair Value Measurements Our Level 3 recurring fair value measurements primarily relate to state and municipal debt instruments, which are valued using non-binding broker quotes or other third-party sources, CRA investments, which are valued using net asset values, as well as contingent consideration obligations. The fair value of our contingent consideration obligations was estimated by applying the income approach based upon significant Level 3 inputs not observable in the market. The range of potential future payments of contingent consideration at December 31, 2019 was between zero and $129 million. The higher end of this range would be payable in the event the future revenues of certain acquired businesses meet all of the required targets during the respective earnout term. For a description of our process to evaluate third-party pricing servicers, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies. Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in accumulated other comprehensive income. The changes in our Level 3 assets and liabilities that are measured on a recurring basis for the years ended December 31, 2019 and 2018 were not material.
Financial Assets and Financial Liabilities Carried at Other than Fair Value | | | | | | | | | | | | | | | | | | | | | | Carrying |
| | Corresponding fair value amount | At December 31, 2019 ($ in millions) | value |
| | Total |
| | Level 1 |
| | Level 2 |
| | Level 3 |
| Financial Assets | | | | | | | | | | Financial assets for which carrying values equal or approximate fair value: | | | | | | | | | | Cash and equivalents(a) | $ | 12,147 |
| | $ | 12,147 |
| | $ | 10,799 |
| | $ | 1,348 |
| | $ | — |
| Other assets(a)(b) | $ | 500 |
| | $ | 500 |
| | $ | 500 |
| | $ | — |
| | $ | — |
| Financial assets carried at other than fair value: | | | | | | | | | | Loan receivables, net(c) | $ | 81,613 |
| | $ | 90,941 |
| | $ | — |
| | $ | — |
| | $ | 90,941 |
| Loan receivables held for sale(c) | $ | 725 |
| | $ | 726 |
| | $ | — |
| | $ | — |
| | $ | 726 |
| | | | | | | | | | | Financial Liabilities | | | | | | | | | | Financial liabilities carried at other than fair value: | | | | | | | | | | Deposits | $ | 65,154 |
| | $ | 65,544 |
| | $ | — |
| | $ | 65,544 |
| | $ | — |
| Borrowings of consolidated securitization entities | $ | 10,412 |
| | $ | 10,513 |
| | $ | — |
| | $ | 7,613 |
| | $ | 2,900 |
| Senior unsecured notes | $ | 9,454 |
| | $ | 9,924 |
| | $ | — |
| | $ | 9,924 |
| | $ | — |
| | | | | | | | | | | | Carrying |
| | Corresponding fair value amount | At December 31, 2018 ($ in millions) | value |
| | Total |
| | Level 1 |
| | Level 2 |
| | Level 3 |
| Financial Assets | | | | | | | | | | Financial assets for which carrying values equal or approximate fair value: | | | | | | | | | | Cash and equivalents(a) | $ | 9,396 |
| | $ | 9,396 |
| | $ | 9,396 |
| | $ | — |
| | $ | — |
| Other assets(a)(b) | $ | 980 |
| | $ | 980 |
| | $ | 980 |
| | $ | — |
| | $ | — |
| Financial assets carried at other than fair value: | | | | | | | | | | Loan receivables, net(c) | $ | 86,712 |
| | $ | 95,305 |
| | $ | — |
| | $ | — |
| | $ | 95,305 |
| | | | | | | | | | | Financial Liabilities | | | | | | | | | | Financial liabilities carried at other than fair value: | | | | | | | | | | Deposits | $ | 64,019 |
| | $ | 63,942 |
| | $ | — |
| | $ | 63,942 |
| | $ | — |
| Borrowings of consolidated securitization entities | $ | 14,439 |
| | $ | 14,400 |
| | $ | — |
| | $ | 8,626 |
| | $ | 5,774 |
| Senior unsecured notes | $ | 9,557 |
| | $ | 9,062 |
| | $ | — |
| | $ | 9,062 |
| | $ | — |
|
| | (a) | For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. |
| | (b) | This balance relates to restricted cash and equivalents, which is included in other assets. |
(c) Under certain retail partner program agreements, the expected sales proceeds in the event of a sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above.
|