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FAIR VALUE MEASUREMENTS | 3 Months Ended
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Mar. 31, 2024
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS ASC Topic 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair values as follows: Level 1:Observable inputs such as quoted prices for identical assets or liabilities in active markets; Level 2:Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3:Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in ASC Topic 820: A.Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets or liabilities, such as a business. B.Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). C.Income approach: Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models). The following tables classify assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:
|  |  | Basis of fair value measurements |  |  |  |
(in millions) | Balance at March 31, 2024 |  | Quoted prices in active markets for identical items (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3) |  | Valuation technique |  | Assets measured at NAV 1
Assets: |  |  |  |  |  |  |  |  |  |  |
Current earn-out receivable | $ | 5 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |  |  | C |  | $ | — |
Investment in equity securities | $ | 25 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | — |  | $ | 25 |
Foreign currency contracts | $ | 42 |  |  | $ | — |  |  | $ | 42 |  |  | $ | — |  |  | A |  | $ | — |
Net investment hedge contracts | $ | 48 |  |  | $ | — |  |  | $ | 48 |  |  | $ | — |  |  | A |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Current earn-out liabilities | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | C |  | $ | — |
Non-current earn-out liabilities | $ | 13 |  |  | $ | — |  |  | $ | — |  |  | $ | 13 |  |  | C |  | $ | — |
Foreign currency contracts | $ | 4 |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |  |  | A |  | $ | — |
|  |  | Basis of fair value measurements |  |  |  |
(in millions) | Balance at December 31, 2023 |  | Quoted prices in active markets for identical items (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3) |  | Valuation technique |  | Assets measured at NAV 1
Assets: |  |  |  |  |  |  |  |  |  |  |
Current earn-out receivable | $ | 5 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |  |  | C |  | $ | — |
Investment in equity securities | $ | 26 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | — |  | $ | 26 |
Foreign currency contracts | $ | 33 |  |  | $ | — |  |  | $ | 33 |  |  | $ | — |  |  | A |  | $ | — |
Net investment hedge contracts | $ | 14 |  |  | $ | — |  |  | $ | 14 |  |  | $ | — |  |  | A |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Current earn-out liability | $ | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |  |  | C |  | $ | — |
Non-current earn-out liability | $ | 13 |  |  | $ | — |  |  | $ | — |  |  | $ | 13 |  |  | C |  | $ | — |
Foreign currency contracts | $ | 3 |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |  |  | A |  | $ | — |
Net investment hedge contracts | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |  |  | A |  | $ | — |
_____________________________ 1 Certain assets that are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. These amounts represent investments in commingled and managed funds that have underlying assets in fixed income securities, equity securities, and other assets and the fair values have been estimated using the net asset value of the Company's ownership interest in partners' capital. The Company’s redemption of its investments with the funds is governed by the partnership agreements and subject to approval from the general partners. With the exception of annual distributions in connection with the Company’s deemed tax liability, distributions from each fund will be received as the underlying investments of the funds are liquidated, the timing of which is unknown. The following table provides a reconciliation of the Company’s Level 3 earn-out assets and liabilities:
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(in millions) | Current earn-out receivables |  | Current earn-out liabilities |  | Non-current earn-out liabilities
Balance at January 1, 2023 | $ | 9 |  |  | $ | 21 |  |  | $ | 10 |
Contingent earn-out recognized upon acquisition or disposition | 5 |  |  | 5 |  |  | 3 |
Change in fair value of contingent consideration | (9) |  |  | (24) |  |  | — |
Balance at December 31, 2023 | $ | 5 |  |  | $ | 2 |  |  | $ | 13 |
Contingent earn-out recognized upon acquisition or disposition | 3 |  |  | — |  |  | — |
Change in fair value of contingent consideration | — |  |  | (1) |  |  | — |
Earn-out settlements | (3) |  |  | — |  |  | — |
Balance at March 31, 2024 | $ | 5 |  |  | $ | 1 |  |  | $ | 13 |
Refer to Note 3, “Acquisitions,” to the Condensed Consolidated Financial Statements in Item 1 for more detail regarding earn-outs.

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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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