XML 38 R21.htm IDEA: XBRL DOCUMENT v3.20.4
Fair Value Disclosures
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Disclosures FAIR VALUE DISCLOSURES
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:
Level 1 – quoted prices in active markets for identical assets or liabilities
Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2020 and 2019: 
 Fair Value Measurements Using
(Millions of dollars)Level 1Level 2Level 3
 202020192020201920202019
Assets
Derivative assets$— $— $200 $167 $— $— 
Investments and securities *21 18 — — 47 28 
Total$21 $18 $200 $167 $47 $28 
Liabilities
Derivative liabilities$— $— $81 $99 $— $— 
*Investments and securities are recorded in prepaid and other current assets and other long-term assets in the company's consolidated balance sheets.
Level 1 investments and securities are marketable securities traded on an exchange. Level 2 investments are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Level 3 investments and securities consist of a venture fund. For the valuation, Linde uses the net asset value received as part of the fund's quarterly reporting, which for the most part is not
based on quoted prices in active markets. In order to reflect current market conditions, Linde proportionally adjusts these by observable market data (stock exchange prices) or current transaction prices.

The level 3 investments and securities as of January 1, 2020 was $28 million. During the year ended December 31, 2020 there was approximately $3 million of foreign currency movement and $16 million in gains recognized in interest expense - net in the company's consolidated statements of income. The balance as of December 31, 2020 was $47 million.
The fair value of cash and cash equivalents, short-term debt, accounts receivable-net, and accounts payable approximate carrying value because of the short-term maturities of these instruments.
The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues. Long-term debt is categorized within either Level 1 or Level 2 of the fair value hierarchy depending on the trading volume of the issues and whether or not they are actively quoted in the market as opposed to traded through over-the-counter transactions. At December 31, 2020, the estimated fair value of Linde’s long-term debt portfolio was $13,611 million versus a carrying value of $12,903 million. At December 31, 2019 the estimated fair value of Linde’s long-term debt portfolio was $12,375 million versus a carrying value of $12,224 million. As Linde AG's assets and liabilities were measured at estimated fair value as of the merger date, differences between the carrying value and the fair value are not significant; remaining differences are attributable to interest rate increases subsequent to when the debt was issued and relative to stated coupon rates.