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

The following tables present the assets held as of December 31, 2018 and 2017, respectively, for which a nonrecurring fair value adjustment was recorded during the years ended December 31, 2018 and 2017, respectively, by major product category and fair value hierarchy. 

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or similar investment of the same issuer (measurement alternative) as a result of the adoption of the recognition and measurement guidance. Of the $815 million in level 3 assets measured at fair value on a nonrecurring basis as of December 31, 2018, $667 million related to such equity securities. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares. (b) Of the $264 million in level 3 assets measured at fair value on a nonrecurring basis as of December 31, 2018, $225 million related to residential real estate loans carried at 

the net realizable value of the underlying collateral (e.g., collateral-dependent loans and other loans charged off in accordance with regulatory guidance). These amounts are classified as level 3 as they are valued using information from broker’s price opinions, appraisals and automated valuation models and discounted based upon the Firm’s experience with actual liquidation values. These discounts ranged from 13% to 54% with a weighted average of 25%. 

There were no material liabilities measured at fair value on a nonrecurring basis at December 31, 2018 and 2017. 

## Nonrecurring fair value changes 

The following table presents the total change in value of assets and liabilities for which a fair value adjustment has been recognized for the years ended December 31, 2018, 2017 and 2016, related to financial instruments held at those dates. 

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(a) Included $149 million for the year ended 2018 of net gains as a result of the measurement alternative. 

For further information about the measurement of impaired collateral- dependent loans, and other loans where the carrying value is based on the fair value of the underlying collateral (e.g., residential mortgage loans charged off in accordance with regulatory guidance), refer to Note 12. 

