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Fair Values | 9 Months Ended
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Sep. 30, 2023
Fair Value Disclosures [Abstract] |
Fair Values | Fair Values Financial Assets and Financial Liabilities Carried at Fair Value The following table summarizes our financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s fair value hierarchy, as of September 30, 2023 and December 31, 2022:
|  | 2023 |  | 2022
(Millions) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities: (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 66 |  |  | $ | 66 |  |  | $ | — |  |  | $ | — |  |  | $ | 41 |  |  | $ | 40 |  |  | $ | 1 |  |  | $ | — |
Debt securities |  | 3,094 |  |  | — |  |  | 3,030 |  |  | 64 |  |  | 4,537 |  |  | — |  |  | 4,490 |  |  | 47 |
Derivatives, gross (a)(b) |  | 594 |  |  | — |  |  | 579 |  |  | 15 |  |  | 521 |  |  | — |  |  | 494 |  |  | 27 |
Total Assets |  | 3,754 |  |  | 66 |  |  | 3,609 |  |  | 79 |  |  | 5,099 |  |  | 40 |  |  | 4,985 |  |  | 74 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives, gross (a) |  | 301 |  |  | — |  |  | 301 |  |  | — |  |  | 801 |  |  | — |  |  | 801 |  |  | — |
Total Liabilities |  | $ | 301 |  |  | $ | — |  |  | $ | 301 |  |  | $ | — |  |  | $ | 801 |  |  | $ | — |  |  | $ | 801 |  |  | $ | — |
(a)Refer to Note 4 for the fair values of investment securities and to Note 8 for the fair values of derivative assets and liabilities on a further disaggregated basis. (b)Level 3 fair value reflects an embedded derivative. Management reviews and applies judgment to the valuation of the embedded derivative that is performed by an independent third party using a Monte Carlo simulation that models a range of probable future stock prices based on implied volatility in a risk neutral framework. Refer to Note 8 for additional information about this embedded derivative. Financial Assets and Financial Liabilities Carried at Other Than Fair Value The following table summarizes the estimated fair values of our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of September 30, 2023 and December 31, 2022. The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of September 30, 2023 and December 31, 2022, and require management’s judgment. These figures may not be indicative of future fair values, nor can the fair value of American Express be estimated by aggregating the amounts presented.
|  | Carrying Value |  | Corresponding Fair Value Amount
2023 (Billions) |  |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Financial Assets: |  |  |  |  |  |  |  |  |  |
Financial assets for which carrying values equal or approximate fair value |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents (a) |  | $ | 44 |  |  | $ | 44 |  |  | $ | 42 |  |  | $ | 2 |  |  | $ | — |
Other financial assets (b) |  | 63 |  |  | 63 |  |  | — |  |  | 63 |  |  | — |
Financial assets carried at other than fair value |  |  |  |  |  |  |  |  |  |
Card Member and Other loans, less reserves (c) |  | 120 |  |  | 124 |  |  | — |  |  | — |  |  | 124 |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |
Financial liabilities for which carrying values equal or approximate fair value |  | 136 |  |  | 136 |  |  | — |  |  | 136 |  |  | — |
Financial liabilities carried at other than fair value |  |  |  |  |  |  |  |  |  |
Certificates of deposit (d) |  | 18 |  |  | 18 |  |  | — |  |  | 18 |  |  | — |
Long-term debt (c) |  | $ | 46 |  |  | $ | 45 |  |  | $ | — |  |  | $ | 45 |  |  | $ | — |
|  | Carrying Value |  | Corresponding Fair Value Amount
2022 (Billions) |  |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Financial Assets: |  |  |  |  |  |  |  |  |  |
Financial assets for which carrying values equal or approximate fair value |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents (a) |  | $ | 34 |  |  | $ | 34 |  |  | $ | 32 |  |  | $ | 2 |  |  | $ | — |
Other financial assets (b) |  | 60 |  |  | 60 |  |  | — |  |  | 60 |  |  | — |
Financial assets carried at other than fair value |  |  |  |  |  |  |  |  |  |
Card Member and Other loans, less reserves (c) |  | 110 |  |  | 113 |  |  | — |  |  | — |  |  | 113 |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |
Financial liabilities for which carrying values equal or approximate fair value |  | 123 |  |  | 123 |  |  | — |  |  | 123 |  |  | — |
Financial liabilities carried at other than fair value |  |  |  |  |  |  |  |  |  |
Certificates of deposit (d) |  | 16 |  |  | 16 |  |  | — |  |  | 16 |  |  | — |
Long-term debt (c) |  | $ | 43 |  |  | $ | 42 |  |  | $ | — |  |  | $ | 42 |  |  | $ | — |
(a)Level 2 fair value amounts reflect time deposits and short-term investments. (b)Balances include Card Member receivables (including fair values of Card Member receivables of $5.4 billion and $5.2 billion held by a consolidated VIE as of September 30, 2023 and December 31, 2022, respectively), other receivables and other miscellaneous assets. (c)Balances include amounts held by a consolidated VIE for which the fair values of Card Member loans were $27.2 billion and $28.4 billion as of September 30, 2023 and December 31, 2022, respectively, and the fair values of Long-term debt were $13.0 billion and $12.3 billion as of September 30, 2023 and December 31, 2022, respectively. (d)Presented as a component of Customer deposits on the Consolidated Balance Sheets. Nonrecurring Fair Value Measurements We have certain assets that are subject to measurement at fair value on a nonrecurring basis. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if they are determined to be impaired or where there are observable price changes for equity investments without readily determinable fair values. We estimate the Level 3 fair value of equity investments without readily determinable fair values, which include investments in our Amex Ventures portfolio, based on price changes as of the date of new similar equity financing transactions completed by the companies in the portfolio. In addition, impairments on such investments are recorded to account for the difference between the estimated fair value and carrying value of an investment based on a qualitative assessment of impairment indicators such as business performance, general market conditions and the economic and regulatory environment. When an impairment triggering event occurs, the fair value measurement is generally derived by taking into account all available information, such as share prices of publicly traded peer companies, internal valuations performed by our investees, and other third-party fair value data. The fair value of impaired investments represents a Level 3 fair value measurement. The carrying value of equity investments without readily determinable fair values totaled $0.9 billion and $1.0 billion as of September 30, 2023 and December 31, 2022, respectively, of which approximately $8 million and $597 million as of September 30, 2023 and December 31, 2022, respectively, represented a nonrecurring Level 3 fair value measurement for certain of our equity investments. These amounts are included within Other assets on the Consolidated Balance Sheets. We recorded unrealized gains of nil and $6 million for the three months ended September 30, 2023 and 2022, respectively, and nil and $94 million for the nine months ended September 30, 2023 and 2022, respectively. Unrealized losses representing impairments were $17 million and $51 million for the three months ended September 30, 2023 and 2022, respectively, and $122 million and $153 million for the nine months ended September 30, 2023 and 2022, respectively. Unrealized gains and losses are recorded in Other, net on the Consolidated Statements of Income. Since the adoption of new accounting guidance on the recognition and measurement of financial assets and financial liabilities on January 1, 2018, cumulative unrealized gains for equity investments without readily determinable fair values totaled $1.0 billion and $1.2 billion as of September 30, 2023 and December 31, 2022, respectively, and cumulative unrealized losses representing impairments were $412 million and $394 million as of September 30, 2023 and December 31, 2022, respectively. In addition, we also have certain equity investments measured at fair value using the net asset value practical expedient. Such investments were immaterial as of both September 30, 2023 and December 31, 2022.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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