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Fair Value Measurements (Tables) | 12 Months Ended
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Jan. 03, 2021
Fair Value Disclosures [Abstract] |
Summary of Derivative Activity | The following table is a summary of the activity related to derivatives and hedges for the fiscal years ended January 3, 2021 and December 29, 2019, net of tax:
| January 3, 2021 | December 29, 2019
(Dollars in Millions) | Sales | Cost of Products Sold | R&D Expense | Interest (Income) Expense | Other (Income) Expense | Sales | Cost of Products Sold | R&D Expense | Interest (Income) Expense | Other (Income) Expense
The effects of fair value, net investment and cash flow hedging: |  |  |  |  |  |  |  |  |  |
Gain (Loss) on net investment hedging relationship: |  |  |  |  |  |  |  |  |  |
Cross currency interest rate swaps contracts: |  |  |  |  |  |  |  |  |  |
Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing | $ | — |  | — |  | — |  | 153 |  | — |  | — |  | — |  | — |  | 159 |  | — |
Amount of gain or (loss) recognized in AOCI | — |  | — |  | — |  | 153 |  | — |  | — |  | — |  | — |  | 159 |  | — |
Gain (Loss) on cash flow hedging relationship: |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts: |  |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from AOCI into income | 12 |  | (329) |  | (137) |  | — |  | (16) |  | (54) |  | (321) |  | (105) |  | — |  | 22 |
Amount of gain or (loss) recognized in AOCI | 44 |  | 298 |  | (191) |  | — |  | (52) |  | (20) |  | (606) |  | (94) |  | — |  | 39 |
Cross currency interest rate swaps contracts: |  |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from AOCI into income | — |  | — |  | — |  | 370 |  | — |  | — |  | — |  | — |  | 292 |  | — |
Amount of gain or (loss) recognized in AOCI | $ | — |  | — |  | — |  | 748 |  | — |  | — |  | — |  | — |  | 417 |  | — |
Schedule of Effect of Derivatives not Designated as Hedging Instruments | The following table is the effect of derivatives not designated as hedging instrument for the fiscal years ended January 3, 2021 and December 29, 2019:
(Dollars in Millions) |  | Location of Gain /(Loss) Recognized in Income on Derivative |  | Gain/(Loss) Recognized In Income on Derivative
Derivatives Not Designated as Hedging Instruments |  |  |  | January 3, 2021 |  | December 29, 2019
Foreign Exchange Contracts |  | Other (income) expense |  | $ | 24 |  |  | (144) |
Schedule of Effect of Net Investment Hedges | The following table is the effect of net investment hedges for the fiscal years ended January 3, 2021 and December 29, 2019:
|  | Gain/(Loss) Recognized In Accumulated OCI |  | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income Into Income |  | Gain/(Loss) Reclassified From Accumulated OCI Into Income
(Dollars in Millions) |  | January 3, 2021 |  | December 29, 2019 |  |  |  | January 3, 2021 |  | December 29, 2019
Debt |  | $ | (473) |  |  | 121 |  |  | Interest (income) expense |  | — |  |  | — |
Cross Currency interest rate swaps |  | $ | 65 |  |  | 488 |  |  | Interest (income) expense |  | — |  |  | — |
Summary of Activity Related to Equity Investments | The following table is a summary of the activity related to equity investments for the fiscal years ended January 3, 2021 and December 29, 2019:
|  | December 29, 2019 |  |  |  |  |  | January 3, 2021
(Dollars in Millions) |  | Carrying Value |  | Changes in Fair Value Reflected in Net Income (1) |  | Sales/ Purchases/Other(2) |  | Carrying Value |  | Non Current Other Assets
Equity Investments with readily determinable value |  | $ | 1,148 |  |  | 527 |  |  | (194) |  |  | 1,481 |  |  | 1,481 |
Equity Investments without readily determinable value |  | $ | 712 |  |  | (55) |  |  | 81 |  |  | 738 |  |  | 738 |
|  | December 30, 2018 |  |  |  |  |  | December 29, 2019
(Dollars in Millions) |  | Carrying Value |  | Changes in Fair Value Reflected in Net Income (1) |  | Sales/ Purchases/Other(2) |  | Carrying Value |  | Non Current Other Assets
Equity Investments with readily determinable value |  | $ | 511 |  |  | 533 |  |  | 104 |  |  | 1,148 |  |  | 1,148 |
Equity Investments without readily determinable value |  | $ | 681 |  |  | (38) |  |  | 69 |  |  | 712 |  |  | 712 |
(1) Recorded in Other Income/Expense (2) Other includes impact of currency
Financial Assets and Liabilities at Fair Value | The Company’s significant financial assets and liabilities measured at fair value as of the fiscal year ended January 3, 2021 and December 29, 2019 were as follows:
|  | 2020 |  | 2019
(Dollars in Millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Total (1)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts |  | $ | — |  |  | 849 |  |  | — |  |  | 849 |  |  | 209 |
Interest rate contracts (2)(3) |  | — |  |  | 240 |  |  | — |  |  | 240 |  |  | 693 |
Total |  | $ | — |  |  | 1,089 |  |  | — |  |  | 1,089 |  |  | 902 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts |  | — |  |  | 702 |  |  | — |  |  | 702 |  |  | 426 |
Interest rate contracts (3) |  | — |  |  | 1,569 |  |  | — |  |  | 1,569 |  |  | 193 |
Total |  | $ | — |  |  | 2,271 |  |  | — |  |  | 2,271 |  |  | 619 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts |  | $ | — |  |  | 49 |  |  | — |  |  | 49 |  |  | 23 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts |  | — |  |  | 38 |  |  | — |  |  | 38 |  |  | 33 |
Available For Sale Other Investments: |  |  |  |  |  |  |  |  |  |
Equity investments(4) |  | 1,481 |  |  | — |  |  | — |  |  | 1,481 |  |  | 1,148 |
Debt securities(5) |  | — |  |  | 14,042 |  |  | — |  |  | 14,042 |  |  | 4,368 |
Other Liabilities |  |  |  |  |  |  |  |  |  |
Contingent Consideration(6) |  | $ |  |  |  | 633 |  |  | 633 |  |  | 1,715 |
Gross to Net Derivative Reconciliation |  | 2020 |  | 2019
(Dollars in Millions) |  |  |  |
Total Gross Assets |  | $ | 1,138 |  |  | 925 |
Credit Support Agreement (CSA) |  | (1,107) |  |  | (841) |
Total Net Asset |  | 31 |  |  | 84 |
Total Gross Liabilities |  | 2,309 |  |  | 652 |
Credit Support Agreement (CSA) |  | (2,172) |  |  | (586) |
Total Net Liabilities |  | $ | 137 |  |  | 66 |
Summarized information about changes in liabilities for contingent consideration is as follows:
|  | 2020 | 2019 | 2018
(Dollars in Millions) |  |  |  |
Beginning Balance |  | $ | 1,715 |  | 397 |  | 600 |
Changes in estimated fair value (7) |  | (1,089) |  | 151 |  | (156) |
Additions |  | 106 |  | 1,246 |  | 125 |
Payments |  | (99) |  | (79) |  | (172) |
Ending Balance |  | $ | 633 |  | 1,715 |  | 397 |
(1)2019 assets and liabilities are all classified as Level 2 with the exception of equity investments of $1,148 million, which are classified as Level 1 and contingent consideration of $1,715 million, classified as Level 3. (2)Includes $1 million of non-current assets as of December 29, 2019. (3)Includes cross currency interest rate swaps and interest rate swaps. (4)Classified as non-current other assets. (5)Classified as cash equivalents and current marketable securities. (6)Includes $594 million, $1,631 million (primarily related to Auris Health) and $397 million, classified as non-current other liabilities as of January 3, 2021, December 29, 2019 and December 30, 2018, respectively. Includes $39 million and $84 million classified as current liabilities as of January 3, 2021 and December 29, 2019, respectively. (7)Ongoing fair value adjustment amounts are recorded primarily in Research and Development expense. The Company recorded a contingent consideration reversal of $1,148 million in 2020 related to the timing of certain developmental milestones associated with the Auris Health acquisition. The reversal of the contingent consideration was recorded in Other income and expense

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