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Derivative Instruments | 12 Months Ended
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Aug. 29, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments
|  | Gross Notional Amount |  | Fair Value of
Current Assets(1) |  | Current Liabilities(2)
As of August 29, 2019 |  |  |  |  |  |
Derivative instruments with hedge accounting designation |  |  |  |  |  |
Cash flow currency hedges |  | $ | 146 |  |  | $ | 1 |  |  | $ | — |
Derivative instruments without hedge accounting designation |  |  |  |  |  |
Non-designated currency hedges |  | 1,871 |  |  | 1 |  |  | (9 | )
Convertible notes settlement obligation(3) |  |  |  | — |  |  | (179 | )
|  |  |  | 1 |  |  | (188 | )
|  |  |  | $ | 2 |  |  | $ | (188 | )
As of August 30, 2018 |  |  |  |  |  |
Derivative instruments with hedge accounting designation |  |  |  |  |  |
Cash flow currency hedges |  | $ | 538 |  |  | $ | — |  |  | $ | (13 | )
Derivative instruments without hedge accounting designation |  |  |  |  |  |
Non-designated currency hedges |  | 1,919 |  |  | 14 |  |  | (10 | )
Convertible notes settlement obligation(3) |  |  |  | — |  |  | (167 | )
|  |  |  |  | 14 |  |  | (177 | )
|  |  |  | $ | 14 |  |  | $ | (190 | )
(1) | Included in receivables – other.
(2) | Included in accounts payable and accrued expenses – other for forward contracts and in current debt for convertible notes settlement obligations.
(3) | Notional amounts of convertible notes settlement obligations as of August 29, 2019 and August 30, 2018 were 4 million and 3 million shares of our common stock, respectively.
Derivative Instruments with Hedge Accounting Designation We utilize currency forward contracts that generally mature within 12 months to hedge our exposure to changes in currency exchange rates. Currency forward contracts are measured at fair value based on market-based observable inputs including currency exchange spot and forward rates, interest rates, and credit-risk spreads (Level 2). We do not use derivative instruments for speculative purposes. Cash Flow Hedges: We utilize cash flow hedges for our exposure from changes in currency exchange rates for certain capital expenditures. We recognized losses of $3 million and $17 million and gains of $15 million for 2019, 2018, and 2017, respectively, in accumulated other comprehensive income from the effective portion of cash flow hedges. Neither the amount excluded from hedge effectiveness nor the reclassifications from accumulated other comprehensive income to earnings were material in 2019, 2018, or 2017. The amounts from cash flow hedges included in accumulated other comprehensive income that are expected to be reclassified into earnings in the next 12 months were also not material. Fair Value Hedges: In 2018, we utilized fair value hedges for our exposure from changes in currency exchange rates for certain monetary assets and liabilities. The effects of fair value hedges on our consolidated statements of operations were as follows:
|  | Other Non-Operating Income (Expense)
For the year ended |  | 2018
Loss on remeasurement of hedged assets and liabilities |  | $ | (25 | )
Gain on derivatives designated as hedged instruments |  | 25 |
Amortization of amounts excluded from hedge effectiveness |  | (32 | )
|  | $ | (32 | )
Derivative Instruments without Hedge Accounting Designation Currency Derivatives: We generally utilize a rolling hedge strategy with currency forward contracts that mature within three months to hedge our exposures of monetary assets and liabilities from changes in currency exchange rates. At the end of each reporting period, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars and the associated outstanding forward contracts are marked to market. Currency forward contracts are valued at fair values based on the middle of bid and ask prices of dealers or exchange quotations (Level 2). Realized and unrealized gains and losses on derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating income (expense). For derivative instruments without hedge accounting designation, we recognized losses of $32 million, $38 million, and $45 million for 2019, 2018, and 2017, respectively. Convertible Notes Settlement Obligations: For settlement obligations associated with our convertible notes subject to mark-to-market accounting treatment, the fair values of the underlying derivative settlement obligations were initially determined using the Black-Scholes option valuation model (Level 2), which requires inputs of stock price, expected stock-price volatility, estimated option life, risk-free interest rate, and dividend rate. The subsequent measurement amounts were based on the volume-weighted-average trading price of our common stock (Level 2). (See "Debt" note.) We recognized losses of $58 million and $124 million for 2019 and 2018, respectively, in other non-operating income (expense), net for the changes in fair value of the derivative settlement obligations. Recognized gains and losses for 2017 were not material. Derivative Counterparty Credit Risk and Master Netting Arrangements Our derivative instruments expose us to credit risk to the extent counterparties may be unable to meet the terms of the contracts. Our maximum exposure to loss due to credit risk if counterparties fail completely to perform according to the terms of the contracts would generally equal the fair value of assets for these contracts as listed in the tables above. We seek to mitigate such risk by limiting our counterparties to major financial institutions and by spreading risk across multiple financial institutions. As of August 29, 2019 and August 30, 2018, amounts netted under our master netting arrangements were not material.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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