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Fair Value Measurement of Assets and Liabilities
 3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurement of Assets and Liabilities FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES
FINANCIAL ASSETS AND LIABILITIES MEASURED AND RECORDED AT FAIR VALUE ON A RECURRING BASIS
The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020:

March 31, 2021
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
(In millions)
Assets:   
Cash and cash equivalents(1)
$853 $— $853 
Short-term investments(2):
U.S. government and agency securities1,340 — 1,340 
Foreign government and agency securities952 — 952 
Corporate debt securities3,422 — 3,422 
Asset-backed securities147 — 147 
Total short-term investments$5,861 $— $5,861 
Funds receivable and customer accounts(3):
Cash and cash equivalents299 — 299 
U.S. government and agency securities8,015 — 8,015 
Foreign government and agency securities4,205 — 4,205 
        Corporate debt securities3,701 — 3,701 
Asset-backed securities443 — 443 
Municipal securities633 — 633 
Total funds receivable and customer accounts$17,296 $— $17,296 
Derivatives171 — 171 
Long-term investments(2),(4):
Foreign government and agency securities1,504 — 1,504 
Corporate debt securities1,405 — 1,405 
Asset-backed securities165 — 165 
Marketable equity securities2,050 2,050 — 
Total long-term investments$5,124 $2,050 $3,074 
Total financial assets$29,305 $2,050 $27,255 
Liabilities:
Derivatives$276 $— $276 
(1) Excludes cash of $4.9 billion not measured and recorded at fair value.
(2) Excludes restricted cash of $26 million and time deposits of $1.5 billion not measured and recorded at fair value.
(3) Excludes cash, time deposits, and funds receivable of $18.3 billion underlying funds receivable and customer accounts not measured and recorded at fair value.
(4) Excludes non-marketable equity securities of $829 million measured using the Measurement Alternative or equity method accounting.

December 31, 2020
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
(In millions)
Assets:   
Cash and cash equivalents(1)
$867 $— $867 
Short-term investments(2):
U.S. government and agency securities1,510 — 1,510 
Foreign government and agency securities277 — 277 
Corporate debt securities4,902 — 4,902 
Total short-term investments6,689 — 6,689 
Funds receivable and customer accounts(3):
Cash and cash equivalents1,770 — 1,770 
U.S. government and agency securities7,933 — 7,933 
Foreign government and agency securities4,296 — 4,296 
Corporate debt securities2,135 — 2,135 
Municipal securities637 — 637 
Total funds receivable and customer accounts16,771 — 16,771 
Derivatives42 — 42 
Long-term investments(2), (4):
U.S. government and agency securities28 — 28 
Foreign government and agency securities1,304 — 1,304 
Corporate debt securities1,259 — 1,259 
Asset-backed securities228 — 228 
Marketable equity securities2,443 2,443 — 
Total long-term investments5,262 2,443 2,819 
Total financial assets$29,631 $2,443 $27,188 
Liabilities:
Derivatives$410 $— $410 
(1) Excludes cash of $3.9 billion not measured and recorded at fair value.
(2) Excludes restricted cash of $88 million and time deposits of $1.6 billion not measured and recorded at fair value.
(3) Excludes cash, time deposits, and funds receivable of $16.6 billion underlying funds receivable and customer accounts not measured and recorded at fair value.
(4) Excludes non-marketable equity securities of $789 million measured using the Measurement Alternative or equity method accounting.

Our marketable equity securities are valued using quoted prices for identical assets in active markets (Level 1). All other financial assets and liabilities are valued using quoted prices for identical instruments in less active markets, readily available pricing sources for comparable instruments, or models using market observable inputs (Level 2).

A majority of our derivative instruments are valued using pricing models that take into account the contract terms as well as multiple inputs where applicable, such as currency rates, interest rate yield curves, option volatility, and equity prices. Our derivative instruments are primarily short-term in nature, generally one month to one year in duration. Certain foreign currency contracts designated as cash flow hedges may have a duration of up to 18 months.

As of March 31, 2021 and December 31, 2020, we did not have any assets or liabilities requiring measurement at fair value without observable market values that would require a high level of judgment to determine fair value (Level 3).
We elect to account for foreign currency denominated available-for-sale debt securities under the fair value option. Election of the fair value option allows us to recognize any gains and losses from fair value changes on such investments in other income (expense), net on the condensed consolidated statements of income to significantly reduce the accounting asymmetry that would otherwise arise when recognizing the corresponding foreign exchange gains and losses relating to customer liabilities. The following table summarizes the estimated fair value of our available-for-sale debt securities under the fair value option as of March 31, 2021 and December 31, 2020:
March 31, 2021December 31, 2020
(In millions)
Funds receivable and customer accounts$2,475 $2,914 
Short-term investments$508 $— 
The following table summarizes the gains (losses) from fair value changes recognized in other income (expense), net related to the available-for-sale debt securities under the fair value option for the three months ended March 31, 2021 and 2020:
Three Months Ended March 31,
 20212020
(In millions)
Funds receivable and customer accounts$(67)$(20)
Short-term investments$(11)$(18)
FINANCIAL ASSETS MEASURED AND RECORDED AT FAIR VALUE ON A NON-RECURRING BASIS

The following tables summarize our financial assets and liabilities held as of March 31, 2021 and December 31, 2020 for which a non-recurring fair value measurement was recorded during the three months ended March 31, 2021 and the year ended December 31, 2020, respectively:
March 31, 2021
Significant Other
Observable Inputs
(Level 2)
(In millions)
Non-marketable equity investments measured using the Measurement Alternative(1)
$33 $33 
Other assets(2)
86 $86 
Total$119 $119 
(1) Excludes non-marketable equity investments of $768 million accounted for under the Measurement Alternative for which no observable price changes occurred during the three months ended March 31, 2021.
(2) Consists of ROU lease assets recorded at fair value pursuant to impairment charges as of March 31, 2021.

December 31, 2020
Significant Other
Observable Inputs
(Level 2)
(In millions)
Non-marketable equity investments measured using the Measurement Alternative(1)
$335 $335 
Other assets(2)
44 44 
Total$379 $379 
(1) Excludes non-marketable equity investments of $444 million accounted for under the Measurement Alternative for which no observable price changes occurred during the year ended December 31, 2020.
(2) Consists of ROU lease assets recorded at fair value pursuant to impairment charges as of December 31, 2020.

We measure the non-marketable equity investments accounted for under the Measurement Alternative at cost minus impairment, if any, adjusted for observable price changes in orderly transactions for an identical or similar investment in the same issuer. Impairment losses on ROU lease assets related to office operating leases are calculated initially using estimated rental income per square foot derived from observable market data.
FINANCIAL ASSETS AND LIABILITIES NOT MEASURED AND RECORDED AT FAIR VALUEOur financial instruments, including cash, restricted cash, time deposits, loans and interest receivable, net, certain customer accounts, and notes receivable are carried at amortized cost, which approximates their fair value. Our fixed rate debt had a carrying value of approximately $8.9 billion and fair value of approximately $9.3 billion as of March 31, 2021. Our fixed rate debt had a carrying value of approximately $8.9 billion and fair value of approximately $9.7 billion as of December 31, 2020. If these financial instruments were measured at fair value in the financial statements, cash would be classified as Level 1; restricted cash, time deposits, certain customer accounts, and long-term debt would be classified as Level 2; and the remaining financial instruments would be classified as Level 3 in the fair value hierarchy.