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.


	December 31, 2020				December 31, 2019
	Carrying amount (net)		Estimated fair value		Carrying amount (net)		Estimated fair value
Assets
Loans and other receivables	$	3,842	$	3,970	$	4,113	$	4,208

Liabilities
Borrowings (Note 11)	$	75,067	$	86,171	$	90,882	$	97,754
Investment contracts (Note 12)	2,049		2,547		2,191		2,588

primarily by a decline in market interest rates. Unlike the carrying amount, the estimated fair value of borrowings included $898 million and $1,106 million of accrued interest at December 31, 2020 and 2019, respectively.

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. Total gross notional was $95,874 million ($45,672 million in GE Capital and $50,202 million in GE Industrial) and $98,018 million ($55,704 million in GE Capital and $42,314 million in GE Industrial) at December 31, 2020 and 2019, respectively. GE Capital notional relates primarily to managing interest rate and currency risk between financial assets and liabilities, and GE Industrial notional relates primarily to managing currency risks related to foreign exchange, certain equity investments and commodity prices.

GE Industrial and GE Capital use cash flow hedges primarily to reduce or eliminate the effects of foreign exchange rate changes. In addition, GE Capital uses fair value hedges to hedge the effects of interest rate and currency changes on debt it has issued as well as net investment hedges to hedge investments in foreign operations. Both GE Industrial and GE Capital also use derivatives not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. We use economic hedges when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting or when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative making hedge accounting unnecessary. Even though the derivative is an effective economic hedge, there may be a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative and the hedged item.


FAIR VALUE OF DERIVATIVES	December 31, 2020						December 31, 2019
	Gross Notional		All other assets		All other liabilities		Gross Notional		All other assets		All other liabilities
Interest rate contracts	$	20,500	$	1,912	$	7	$	23,918	$	1,636	$	11
Currency exchange contracts	7,512		165		128		7,044		99		46

Derivatives accounted for as hedges	$	28,011	$	2,077	$	135	$	30,961	$	1,734	$	57

Interest rate contracts	$	448	$	6	$	1	$	3,185	$	18	$	12
Currency exchange contracts	65,379		764		913		62,165		697		744
Other contracts	2,036		218		71		1,706		123		40
Derivatives not accounted for as hedges	$	67,863	$	988	$	983	$	67,056	$	838	$	796

Gross derivatives	$	95,874	$	3,065	$	1,118	$	98,018	$	2,572	$	853

Netting and credit adjustments			$	(647)	$	(647)			$	(546)	$	(546)
Cash collateral adjustments			(1,935)		(104)				(1,286)		(105)
Net derivatives recognized in Statement of Financial Position			$	483	$	367			$	740	$	202

Net accrued interest			$	—	$	—			$	182	$	1
Securities held as collateral			(2)		—				(469)		—
Net amount			$	480	$	367			$	452	$	203

It is standard market practice to post or receive cash collateral with our derivative counterparties in order to minimize counterparty exposure. Included in GE Capital cash, cash equivalents and restricted cash was total net cash collateral received on derivatives of $3,289 million (comprising $4,203 million received and $914 million posted) at December 31, 2020, and $1,584 million (comprising $2,294 million received and $710 million posted) at December 31, 2019. Of these amounts, $1,968 million and $695 million at December 31, 2020 and December 31, 2019, respectively, were received on interest rate derivatives traded through clearing houses, which are recorded as a reduction of derivative assets.

Also included in total net cash collateral received are amounts presented as cash collateral adjustments in the table above, amounts related to accrued interest on interest rate derivatives presented as a reduction of Net accrued interest of $292 million and $207 million at December 31, 2020 and December 31, 2019, respectively, and excess net cash collateral posted of $802 million (comprising $3 million received and $805 million posted) at December 31, 2020, and $499 million (comprising $104 million received and $603 million posted) at December 31, 2019, which are excluded from cash collateral adjustments in the table above.

Securities held as collateral excluded excess collateral received of zero and $27 million at December 31, 2020 and December 31, 2019, respectively. In the third quarter of 2020, one of our counterparties converted its collateral from securities to cash, which is in line with our other derivative counterparties.

FAIR VALUE HEDGES. We use derivatives to hedge the effects of interest rate and currency exchange rate changes on our borrowings. At December 31, 2020, the cumulative amount of hedging adjustments of $5,687 million (including $2,248 million on discontinued hedging relationships) was included in the carrying amount of the hedged liability of $29,374 million. At December 31, 2019, the cumulative amount of hedging adjustments of $4,234 million (including $2,458 million on discontinued hedging relationships) was included in the carrying amount of the hedged liability of $42,759 million. The cumulative amount of hedging adjustments was primarily recorded in long-term borrowings.

CASH FLOW HEDGES. We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts in our industrial businesses and to convert foreign currency debt that we have issued in our financial services business back to our functional currency. 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 gain (loss) recognized in AOCI was $(61) million, $25 million and $(154) million for the years ended December 31, 2020, 2019 and 2018, respectively. The gain (loss) reclassified from AOCI to earnings was $(7) million, $(60) million and $(102) million for the years ended December 31, 2020, 2019 and 2018, respectively. These amounts were primarily related to currency exchange and interest rate contracts.

The total amount in AOCI related to cash flow hedges of forecasted transactions was a $16 million gain at December 31, 2020. We expect to reclassify $32 million of loss to earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. For all periods presented we recognized an immaterial amount related to hedged forecasted transactions and firm commitments that did not occur by the end of the originally specified period. At December 31, 2020, 2019 and 2018, the maximum term of derivative instruments that hedge forecasted transactions was 14 years, 13 years and 14 years, respectively.

NET INVESTMENT HEDGES. We invest in foreign operations that conduct their financial services activities in currencies other than the U.S. dollar. We hedge the currency risk associated with those investments primarily using non-derivative instruments such as debt denominated in a foreign currency and short-term currency exchange contracts under which we receive U.S. dollars and pay foreign currency. For these hedges, the portion of the fair value changes of the derivatives or debt instruments that relates to changes in spot currency exchange rates is recorded in a separate component of AOCI. The portion of the fair value changes of the derivatives related to differences between spot and forward rates is recorded in earnings each period. The amounts recorded in AOCI affect earnings if the hedged investment is sold, substantially liquidated, or control is lost.

The total gain (loss) recognized in AOCI on hedging instruments for the years ended December 31, 2020, 2019 and 2018 was $(675) million, $120 million and $646 million, respectively, comprising $(41) million, $(36) million and $162 million on currency exchange contracts and $(633) million, $156 million and $484 million on foreign currency debt, respectively. For all periods presented we recognized an immaterial amount excluded from assessment and recognized in earnings.

The carrying value of foreign currency debt designated as net investment hedges was $8,348 million, $9,190 million and $12,458 million at December 31, 2020, 2019 and 2018 respectively. The total reclassified from AOCI into earnings was zero, $7 million and $(1) million for the years ended December 31, 2020, 2019 and 2018, respectively.

EFFECTS OF DERIVATIVES ON EARNINGS. All derivatives are marked to fair value on our Statement of Financial Position, whether they are designated in a hedging relationship for accounting purposes or are used as economic hedges. For derivatives not designated as hedging instruments, substantially all of the gain or loss recognized in earnings is offset by either the current period change in value of underlying exposures which is recorded in earnings in the current period or a future period when the recording of the exposures occurs.


	2020										2019
	Revenues		Cost of sales		Interest Expense		SG&A		Other Income		Revenues		Cost of sales		Interest Expense		SG&A		Other Income
Total amounts presented in the consolidated Statement of Earnings (Loss)	$	79,619	$	60,421	$	3,273	$	12,621	$	11,387	$	95,214	$	66,911	$	4,227	$	13,949	$	2,222

Total effect of cash flow hedges	$	88	$	(56)	$	(40)	$	1	$	—	$	5	$	(24)	$	(37)	$	(3)	$	—

Hedged items					$	(1,775)									$	(1,276)
Derivatives designated as hedging instruments					1,743										1,229
Total effect of fair value hedges					$	(31)									$	(48)

Interest rate contracts	$	(35)	$	—	$	(11)	$	—	$	8	$	(24)	$	—	$	(50)	$	—	$	(6)
Currency exchange contracts	(328)		16		—		129		19		180		(35)		—		(6)		(59)
Other	—		—		—		86		(46)		(2)		—		195		—		7
Total effect of derivatives not designated as hedges	$	(362)	$	16	$	(11)	$	215	$	(19)	$	154	$	(35)	$	145	$	(6)	$	(58)

The gain (loss) excluded for cash flow hedges was $25 million and $(1) million for the years ended December 31, 2020 and 2019, respectively. This amount is recognized primarily in Revenues in our consolidated Statement of Earnings (Loss).