There were no financial instruments recorded at fair value on a recurring basis classified in Level 3 of the valuation hierarchy in 2017.

The table below includes a roll forward of the balance sheet amount for the year ended Dec. 31, 2016 (including the change in fair value), for financial instruments classified in Level 3 of the valuation hierarchy.

Fair value measurements for assets using significant unobservable inputs

(in millions)	Loans
Fair value at Dec. 31, 2015	$ —
Transfers into Level 3	19
Total gains for the period included in earnings (a)	2
Purchases, issuances and sales:
Purchases	113
Issuances	1
Sales	(135)
Fair value at Dec. 31, 2016	$ —
Change in unrealized gains for the period included in
earnings for assets held at the end of the reporting
period	$ —

(a) Reported in investment and other income.

# Assets and liabilities measured at fair value on a nonrecurring basis

Under certain circumstances, we make adjustments to fair value our assets, liabilities and unfunded lending-related commitments although they are not measured at fair value on an ongoing basis. An example would be the recording of an impairment of an asset.

The following tables present the financial instruments carried on the consolidated balance sheet by caption and by level in the fair value hierarchy as of Dec. 31, 2017 and Dec. 31, 2016, for which a nonrecurring change in fair value has been recorded during the years ended Dec. 31, 2017 and Dec. 31, 2016.

Assets measured at fair value on a nonrecurring basis at Dec. 31, 2017

(in millions)	Level 1	Level 2	Level 3	Total
carriyng
value
Loans (a)	$ —	$ 73	$ 6	$ 79
Other assets (b)	—	4	—	4
Total assets at fair
value on a
nonrecurring basis	$ —	$ 77	$ 6	$ 83

Assets measured at fair value on a nonrecurring basis at Dec. 31, 2016

(in millions)	Level 1	Level 2	Level 3	Total
carriyng
value
Loans (a)	$ —	$ 84	$ 7	$ 91
Other assets (b)	—	4	—	4
Total assets at fair
value on a
nonrecurring basis	$ —	$ 88	$ 7	$ 95

(a) During the years ended Dec. 31, 2017 and Dec. 31, 2016, the fair value of these loans decreased \$1 million and \$2 million, respectively, based on the fair value of the underlying collateral based on guidance in ASC 310, Receivables, with an offset to the allowance for credit losses.

(b) Includes other assets received in satisfaction of debt.

# Estimated fair value of financial instruments

The carrying amounts of our financial instruments (i.e., monetary assets and liabilities) are determined under different accounting methods - see Note 1 of the Notes to Consolidated Financial Statements. The following disclosure discusses these instruments on a uniform fair value basis. However, active markets do not exist for a significant portion of these instruments. For financial instruments where quoted prices from identical assets and liabilities in active markets do not exist, we determine fair value based on discounted cash flow analysis and comparison to similar instruments. Discounted cash flow analysis is dependent upon estimated future cash flows and the level of interest rates. Other judgments would result in different fair values. The fair value information supplements the basic financial statements and other traditional financial data presented throughout this report.

A summary of the practices used for determining fair value and the respective level in the valuation hierarchy for financial assets and liabilities not recorded at fair value follows.

# Interest-bearing deposits with the Federal Reserve and other central banks and interest-bearing deposits with banks

The estimated fair value of interest-bearing deposits with the Federal Reserve and other central banks is equal to the book value as these interest-bearing deposits are generally considered cash equivalents. These instruments are classified as Level 2 within the valuation hierarchy. The estimated fair value of interest-bearing deposits with banks is generally determined using discounted cash flows and duration