International Business Machines (IBM) 10-Q28 Jul 202020 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information	6 Months Ended
Document and Entity Information	Jun. 30, 2020shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2020
Entity File Number	1-2360
Entity Registrant Name	INTERNATIONAL BUSINESS MACHINES CORPORATION
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	13-0871985
Entity Address, Address Line One	One New Orchard Road
Entity Address, City or Town	Armonk
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10504
City Area Code	914
Local Phone Number	499-1900
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Central Index Key	0000051143
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	890,578,748
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
New York Stock Exchange \| Common Stock
Document Information [Line Items]
Title of 12(b) Security	Capital stock, par value $.20 per share
Trading Symbol	IBM
Security Exchange Name	NYSE
New York Stock Exchange \| 2.750% Notes due 2020
Document Information [Line Items]
Title of 12(b) Security	2.750% Notes due 2020
Trading Symbol	IBM 20B
Security Exchange Name	NYSE
New York Stock Exchange \| 1.875% Notes due 2020
Document Information [Line Items]
Title of 12(b) Security	1.875% Notes due 2020
Trading Symbol	IBM 20A
Security Exchange Name	NYSE
New York Stock Exchange \| 0.500% Notes due 2021
Document Information [Line Items]
Title of 12(b) Security	0.500% Notes due 2021
Trading Symbol	IBM 21B
Security Exchange Name	NYSE
New York Stock Exchange \| 2.625% Notes due 2022
Document Information [Line Items]
Title of 12(b) Security	2.625% Notes due 2022
Trading Symbol	IBM 22A
Security Exchange Name	NYSE
New York Stock Exchange \| 1.25% Notes due 2023
Document Information [Line Items]
Title of 12(b) Security	1.250% Notes due 2023
Trading Symbol	IBM 23A
Security Exchange Name	NYSE
New York Stock Exchange \| 0.375% Notes due 2023
Document Information [Line Items]
Title of 12(b) Security	0.375% Notes due 2023
Trading Symbol	IBM 23B
Security Exchange Name	NYSE
New York Stock Exchange \| 1.125% Notes due 2024
Document Information [Line Items]
Title of 12(b) Security	1.125% Notes due 2024
Trading Symbol	IBM 24A
Security Exchange Name	NYSE
New York Stock Exchange \| 2.875% Notes due 2025
Document Information [Line Items]
Title of 12(b) Security	2.875% Notes due 2025
Trading Symbol	IBM 25A
Security Exchange Name	NYSE
New York Stock Exchange \| 0.950% Notes due 2025
Document Information [Line Items]
Title of 12(b) Security	0.950% Notes due 2025
Trading Symbol	IBM 25B
Security Exchange Name	NYSE
New York Stock Exchange \| 0.875% Notes due 2025
Document Information [Line Items]
Title of 12(b) Security	0.875% Notes due 2025
Trading Symbol	IBM 25C
Security Exchange Name	NYSE
New York Stock Exchange \| 0.300% Notes due 2026
Document Information [Line Items]
Title of 12(b) Security	0.300% Notes due 2026
Trading Symbol	IBM 26B
Security Exchange Name	NYSE
New York Stock Exchange \| 1.250% Notes due 2027
Document Information [Line Items]
Title of 12(b) Security	1.250% Notes due 2027
Trading Symbol	IBM 27B
Security Exchange Name	NYSE
New York Stock Exchange \| 0.300% Notes due 2028
Document Information [Line Items]
Title of 12(b) Security	0.300% Notes due 2028
Trading Symbol	IBM 28B
Security Exchange Name	NYSE
New York Stock Exchange \| 1.750% Notes due 2028
Document Information [Line Items]
Title of 12(b) Security	1.750% Notes due 2028
Trading Symbol	IBM 28A
Security Exchange Name	NYSE
New York Stock Exchange \| 1.500% Notes due 2029
Document Information [Line Items]
Title of 12(b) Security	1.500% Notes due 2029
Trading Symbol	IBM 29
Security Exchange Name	NYSE
New York Stock Exchange \| 1.750% Notes due 2031
Document Information [Line Items]
Title of 12(b) Security	1.750% Notes due 2031
Trading Symbol	IBM 31
Security Exchange Name	NYSE
New York Stock Exchange \| 0.650% Notes due 2032
Document Information [Line Items]
Title of 12(b) Security	0.650% Notes due 2032
Trading Symbol	IBM 32A
Security Exchange Name	NYSE
New York Stock Exchange \| 1.200% Notes due 2040
Document Information [Line Items]
Title of 12(b) Security	1.200% Notes due 2040
Trading Symbol	IBM 40
Security Exchange Name	NYSE
New York Stock Exchange \| 7.00% Debentures due 2025
Document Information [Line Items]
Title of 12(b) Security	7.00% Debentures due 2025
Trading Symbol	IBM 25
Security Exchange Name	NYSE
New York Stock Exchange \| 6.22% Debentures due 2027
Document Information [Line Items]
Title of 12(b) Security	6.22% Debentures due 2027
Trading Symbol	IBM 27
Security Exchange Name	NYSE
New York Stock Exchange \| 6.50% Debentures due 2028
Document Information [Line Items]
Title of 12(b) Security	6.50% Debentures due 2028
Trading Symbol	IBM 28
Security Exchange Name	NYSE
New York Stock Exchange \| 7.00% Debentures due 2045
Document Information [Line Items]
Title of 12(b) Security	7.00% Debentures due 2045
Trading Symbol	IBM 45
Security Exchange Name	NYSE
New York Stock Exchange \| 7.125% Debentures due 2096
Document Information [Line Items]
Title of 12(b) Security	7.125% Debentures due 2096
Trading Symbol	IBM 96
Security Exchange Name	NYSE
Chicago Stock Exchange \| Common Stock
Document Information [Line Items]
Title of 12(b) Security	Capital stock, par value $.20 per share
Trading Symbol	IBM
Security Exchange Name	CHX

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED INCOME STATEMENT - USD ($) $ in Millions	3 Months Ended			6 Months Ended
CONSOLIDATED INCOME STATEMENT - USD ($) $ in Millions	Jun. 30, 2020	Jun. 30, 2019		Jun. 30, 2020	Jun. 30, 2019
Revenue	$ 18,123	$ 19,161		$ 35,694	$ 37,342
Cost	9,423	10,151		19,071	20,290
Gross profit	8,700	9,010		16,622	17,053
Expense and other (income):
Selling, general and administrative	5,248	5,456		11,203	10,147
Research, development and engineering	1,582	1,407		3,207	2,840
Intellectual property and custom development income	(203)	(222)		(319)	(323)
Other (income) and expense	179	(747)		361	(820)
Interest expense	323	348		649	558
Total expense and other (income)	7,129	6,242		15,101	12,402
Income from continuing operations before income taxes	1,571	2,768		1,522	4,651
Provision for/(benefit from) income taxes	209	269		(1,017)	558
Income from continuing operations	1,362	2,499		2,538	4,093
Income/(loss) from discontinued operations, net of tax	(1)	(1)		(2)	(4)
Net income	$ 1,361	$ 2,498		$ 2,536	$ 4,089
Assuming dilution:
Continuing operations (in dollars per share)	$ 1.52	$ 2.81		$ 2.83	$ 4.58
Discontinued operations (in dollars per share)	0	0		0	0
Total (in dollars per share)	1.52	2.81		2.83	4.58
Basic:
Continuing operations (in dollars per share)	1.53	2.82		2.85	4.61
Discontinued operations (in dollars per share)	0	0		0	0
Total (in dollars per share)	$ 1.53	$ 2.82		$ 2.85	$ 4.61
Weighted-average number of common shares outstanding:
Assuming dilution (in shares)	894,939,080	890,831,801		894,989,159	892,371,164
Basic (in shares)	889,435,166	886,273,682		888,702,256	887,927,612
Services
Revenue	$ 10,937	$ 11,836	[1]	$ 22,311	$ 23,751	[1]
Cost	7,520	8,181	[1]	15,363	16,453	[1]
Sales
Revenue	6,918	6,974	[1]	12,813	12,836	[1]
Cost	1,739	1,741	[1]	3,363	3,344	[1]
Financing
Revenue	268	351		570	756
Cost	$ 165	$ 228		$ 345	$ 492

[1]	Reclassified to conform to current period presentation. Refer to note 1, “Basis of Presentation,” for additional information.

CONSOLIDATED STATEMENT OF COMPR

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income	$ 1,361	$ 2,498	$ 2,536	$ 4,089
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments	4	5	(915)	176
Net changes related to available-for-sale securities:
Unrealized gains/(losses) arising during the period	1	(2)	1	(3)
Total net changes related to available-for-sale securities	1	(2)	1	(3)
Unrealized gains/(losses) on cash flow hedges:
Unrealized gains/(losses) arising during the period	(36)	(6)	(216)	(359)
Reclassification of (gains)/losses to net income	(59)	(168)	32	(70)
Total unrealized gains/(losses) on cash flow hedges	(94)	(175)	(184)	(429)
Retirement-related benefit plans:
Prior service costs/(credits)			(4)
Net (losses)/gains arising during the period	57	116	65	113
Curtailments and settlements	13	3	21	4
Amortization of prior service (credits)/costs	0	(3)	1	(6)
Amortization of net (gains)/losses	566	460	1,136	924
Total retirement-related benefit plans	637	576	1,219	1,035
Other comprehensive income/(loss), before tax	548	405	121	779
Income tax (expense)/benefit related to items of other comprehensive income	(21)	(64)	(281)	(131)
Other comprehensive income/(loss), net of tax	527	340	(160)	649
Total comprehensive income/(loss)	$ 1,888	$ 2,839	$ 2,377	$ 4,738

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 12,041	$ 8,172
Restricted cash	147	141
Marketable securities	2,063	696
Notes and accounts receivable - trade (net of allowances of $369 in 2020 and $299 in 2019)	6,543	7,870
Short-term financing receivables (net of allowances of $206 in 2020 and $188 in 2019)	11,967	14,192
Other accounts receivable (net of allowances of $32 in 2020 and $33 in 2019)	937	1,733
Inventories, at lower of average cost or net realizable value:
Finished goods	288	220
Work in process and raw materials	1,581	1,399
Total	1,869	1,619
Deferred costs	2,127	1,896
Prepaid expenses and other current assets	2,260	2,101
Total current assets	39,953	38,420
Property, plant and equipment	31,666	32,028
Less: Accumulated depreciation	21,957	22,018
Property, plant and equipment - net	9,709	10,010
Operating right-of-use assets - net	4,774	4,996
Long-term financing receivables (net of allowances of $58 in 2020 and $33 in 2019)	7,351	8,712
Prepaid pension assets	7,254	6,865
Deferred costs	2,445	2,472
Deferred taxes	8,689	5,182
Goodwill	57,833	58,222
Intangible assets - net	14,270	15,235
Investments and sundry assets	1,921	2,074
Total assets	154,200	152,186
Current liabilities:
Taxes	2,627	2,839
Short-term debt	9,289	8,797
Accounts payable	4,719	4,896
Compensation and benefits	3,486	3,406
Deferred income	12,469	12,026
Operating lease liabilities	1,343	1,380
Other accrued expenses and liabilities	4,509	4,357
Total current liabilities	38,442	37,701
Long-term debt	55,449	54,102
Retirement and nonpension postretirement benefit obligations	16,483	17,142
Deferred income	3,787	3,851
Operating lease liabilities	3,684	3,879
Other liabilities	15,666	14,526
Total liabilities	133,512	131,202
IBM stockholders' equity:
Common stock, par value $.20 per share, and additional paid-in capital; Shares authorized: 4,687,500,000; Shares issued: 2020-2,241,228,730; 2019-2,237,996,975	56,135	55,895
Retained earnings	162,559	162,954
Treasury stock, at cost; Shares: 2020-1,350,649,982; 2019-1,350,886,521	(169,386)	(169,413)
Accumulated other comprehensive income/(loss)	(28,757)	(28,597)
Total IBM stockholders' equity	20,551	20,841
Noncontrolling interests	137	144
Total equity	20,688	20,985
Total liabilities and equity	$ 154,200	$ 152,186

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEET
Notes and accounts receivable - trade, allowances	$ 369	$ 299
Short-term financing receivables, allowances	206	188
Other accounts receivable, allowances	32	33
Long-term financing receivables, allowances	$ 58	$ 33
Common stock, Par value (in dollars per share)	$ 0.20	$ 0.20
Common stock, Shares authorized (in shares)	4,687,500,000	4,687,500,000
Common stock, Shares issued (in shares)	2,241,228,730	2,237,996,975
Treasury stock, Shares (in shares)	1,350,649,982	1,350,886,521

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income	$ 2,536	$ 4,089
Adjustments to reconcile net income to cash provided by operating activities
Depreciation	2,068	2,130
Amortization of intangibles	1,245	610
Stock-based compensation	436	248
Net (gain)/loss on asset sales and other	161	(787)
Changes in operating assets and liabilities, net of acquisitions/divestitures	1,606	1,410
Net cash provided by operating activities	8,052	7,700
Cash flows from investing activities:
Payments for property, plant and equipment	(1,215)	(1,122)
Proceeds from disposition of property, plant and equipment	82	383
Investment in software	(301)	(305)
Acquisition of businesses, net of cash acquired	(19)	(43)
Divestiture of businesses, net of cash transferred	757	888
Non-operating finance receivables - net	95	3,828
Purchases of marketable securities and other investments	(3,478)	(1,803)
Proceeds from disposition of marketable securities and other investments	1,942	1,483
Net cash provided by/(used in) investing activities	(2,138)	3,309
Cash flows from financing activities:
Proceeds from new debt	10,190	31,249
Payments to settle debt	(8,423)	(3,869)
Short-term borrowings/(repayments) less than 90 days - net	(449)	(307)
Common stock repurchases		(1,236)
Common stock repurchases for tax withholdings	(211)	(152)
Financing - other	43	41
Cash dividends paid	(2,890)	(2,833)
Net cash provided by/(used in) financing activities	(1,739)	22,894
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(301)	27
Net change in cash, cash equivalents and restricted cash	3,874	33,930
Cash, cash equivalents and restricted cash at beginning of period	8,314	11,604
Cash, cash equivalents and restricted cash at end of period	$ 12,188	$ 45,534

CONSOLIDATED STATEMENT OF EQUIT

CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions	Total IBM Stockholders' EquityCumulative Effect, Period of Adoption, Adjustment	[1]	Total IBM Stockholders' Equity	Common Stock and Additional Paid-in Capital	Retained EarningsCumulative Effect, Period of Adoption, Adjustment	[1]	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income/(Loss)	Non-Controlling Interests	Cumulative Effect, Period of Adoption, Adjustment	[1]	Total
Balance at the Beginning of the Period at Dec. 31, 2018			$ 16,796	$ 55,151			$ 159,206	$ (168,071)	$ (29,490)	$ 134			$ 16,929
Net income plus other comprehensive income/(loss):
Net income			4,089				4,089						4,089
Other comprehensive income/(loss)			649						649				649
Total comprehensive income/(loss)			4,738										4,738
Cash dividends paid - common stock			(2,833)				(2,833)						(2,833)
Common stock issued under employee plans			254	254									254
Purchases and sales of treasury stock under employee plans - net			(88)				11	(99)					(88)
Other treasury shares purchased, not retired			(1,216)					(1,216)					(1,216)
Changes in other equity			(5)				(5)						(5)
Changes in noncontrolling interests										(3)			(3)
Balance at the End of the Period at Jun. 30, 2019			17,645	55,404			160,467	(169,385)	(28,841)	131			17,776
Balance at the Beginning of the Period at Mar. 31, 2019			16,481	55,287			159,396	(169,021)	(29,182)	126			16,607
Net income plus other comprehensive income/(loss):
Net income			2,498				2,498						2,498
Other comprehensive income/(loss)			340						340				340
Total comprehensive income/(loss)			2,839										2,839
Cash dividends paid - common stock			(1,435)				(1,435)						(1,435)
Common stock issued under employee plans			117	117									117
Purchases and sales of treasury stock under employee plans - net			(40)				9	(49)					(40)
Other treasury shares purchased, not retired			(316)					(316)					(316)
Changes in noncontrolling interests										5			5
Balance at the End of the Period at Jun. 30, 2019			17,645	55,404			160,467	(169,385)	(28,841)	131			17,776
Balance at the Beginning of the Period at Dec. 31, 2019	$ (66)		20,841	55,895	$ (66)		162,954	(169,413)	(28,597)	144	$ (66)		20,985
Net income plus other comprehensive income/(loss):
Net income			2,536				2,536						2,536
Other comprehensive income/(loss)			(160)						(160)				(160)
Total comprehensive income/(loss)			2,377										2,377
Cash dividends paid - common stock			(2,890)				(2,890)						(2,890)
Common stock issued under employee plans			239	239									239
Purchases and sales of treasury stock under employee plans - net			50				24	26					50
Changes in noncontrolling interests										(7)			(7)
Balance at the End of the Period at Jun. 30, 2020			20,551	56,135			162,559	(169,386)	(28,757)	137			20,688
Balance at the Beginning of the Period at Mar. 31, 2020			19,999	56,092			162,626	(169,437)	(29,283)	129			20,128
Net income plus other comprehensive income/(loss):
Net income			1,361				1,361						1,361
Other comprehensive income/(loss)			527						527				527
Total comprehensive income/(loss)			1,888										1,888
Cash dividends paid - common stock			(1,450)				(1,450)						(1,450)
Common stock issued under employee plans			42	42									42
Purchases and sales of treasury stock under employee plans - net			72				22	50					72
Changes in noncontrolling interests										8			8
Balance at the End of the Period at Jun. 30, 2020			$ 20,551	$ 56,135			$ 162,559	$ (169,386)	$ (28,757)	$ 137			$ 20,688

[1]	Reflects the adoption of the FASB guidance on current expected credit losses. Refer to note 2, “Accounting Changes.”

CONSOLIDATED STATEMENT OF EQU_2

CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
CONSOLIDATED STATEMENT OF EQUITY
Cash dividend per common share	$ 1.63	$ 1.62	$ 3.25	$ 3.19
Common stock issued under employee plans (in shares)	2,296,269	1,883,226	3,231,755	3,275,215
Purchases of treasury stock under employee plans (in shares)	1,311,046	681,109	1,621,500	1,135,819
Sales of treasury stock under employee plans (in shares)	1,701,568	330,849	1,858,039	413,711
Other treasury shares purchased, not retired (in shares)		2,300,679		9,157,357

Basis of Presentation

Basis of Presentation	6 Months Ended
Basis of Presentation	Jun. 30, 2020
Basis of Presentation
Basis of Presentation	1. Basis o f Presentation: The accompanying Consolidated Financial Statements and footnotes of the International Business Machines Corporation (IBM or the company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial statements and footnotes are unaudited. In the opinion of the company’s management, these statements include all adjustments, which are only of a normal recurring nature, necessary to present a fair statement of the company’s results of operations, financial position and cash flows. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. In the first quarter of 2020, the company realigned offerings and the related management system to reflect divestitures completed in the second half of 2019 and tighter integration of certain industry-related consulting services. These changes impacted a few of the company’s reportable segments, but did not impact the Consolidated Financial Statements. Refer to note 4, “Segments,” for additional information on the company’s reportable segments. The periods presented in this Form 10-Q are reported on a comparable basis. On April 6, 2020, Arvind Krishna became Chief Executive Officer of IBM and announced a number of management changes which did not impact the company’s reportable segments. For the three months ended June 30, 2020, the company reported a provision for income taxes of $209 million. For the six months ended June 30, 2020, the company reported a benefit from income taxes of $1,017 million. The tax benefit was primarily related to the tax impacts of an intra-entity sale of certain of the company’s intellectual property in the first quarter, which required the recognition of a $3,442 million deferred tax asset. The recognition of this deferred tax asset and the related impacts resulted in a net one-time benefit in the first quarter of $939 million. For the three and six months ended June 30, 2019, the company reported a provision for income taxes of $269 million and $558 million, respectively. On July 9, 2019, the company completed the acquisition of all of the outstanding shares of Red Hat, Inc. (Red Hat). Refer to note 5, “Acquisitions & Divestitures,” and note 10, “Intangible Assets Including Goodwill,” for additional information. Noncontrolling interest amounts of $6.8 million and $4.9 million, net of tax, for the three months ended June 30, 2020 and 2019, respectively, and $11.3 million and $11.9 million, net of tax, for the six months ended June 30, 2020 and 2019, respectively, are included as a reduction within other (income) and expense in the Consolidated Income Statement. Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the company’s 2019 Annual Report. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, beginning in the third-quarter 2019, revenues and related costs for post-contract support provided for perpetual (one-time charge) software licenses have been reclassified from Services Revenue to Sales Revenue and Services Cost to Sales Cost within the Consolidated Income Statement. The revenue and cost amounts reclassified were $0.5 billion and $0.1 billion, respectively, for the three months June 30, 2019 six months June 30, 2019

Accounting Changes

Accounting Changes	6 Months Ended
Accounting Changes	Jun. 30, 2020
Accounting Changes
Accounting Changes	2. Accounting Changes: New Standards to be Implemented Simplifying the Accounting for Income Taxes Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Standards Implemented Reference Rate Reform Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Simplifying the Test for Goodwill Impairment Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Financial Instruments–Credit Losses Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Leases Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters For all other standards that the company adopted in 2019, there was no material impact in the consolidated financial results.

Revenue Recognition

Revenue Recognition	6 Months Ended
Revenue Recognition	Jun. 30, 2020
Revenue Recognition
Revenue Recognition	3. Revenue Recognition: Disaggregation of Revenue The following tables provide details of revenue by major products/service offerings and by geography. Revenue by Major Products/Service Offerings Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Cloud & Data Platforms $ 2,797 $ 2,173 $ 5,333 $ 4,090 Cognitive Applications 1,246 1,372 * 2,428 2,609 * Transaction Processing Platforms 1,706 2,018 3,226 3,830 Total Cloud & Cognitive Software $ 5,748 $ 5,563 * $ 10,987 $ 10,530 * Consulting 1,936 2,020 * 4,007 4,021 * Application Management 1,734 1,919 3,573 3,827 Global Process Services 221 258 447 505 Total Global Business Services $ 3,890 $ 4,197 * $ 8,027 $ 8,353 * Infrastructure & Cloud Services 4,813 5,174 9,729 10,383 Technology Support Services 1,503 1,663 3,054 3,328 Total Global Technology Services $ 6,316 $ 6,837 $ 12,783 $ 13,711 Systems Hardware 1,488 1,328 2,484 2,241 Operating Systems Software 365 425 736 840 Total Systems $ 1,852 $ 1,753 $ 3,220 $ 3,081 Global Financing** 265 351 564 757 Other 50 460 * 113 911 * Total revenue $ 18,123 $ 19,161 $ 35,694 $ 37,342 * Recast to conform to current period presentation. Refer to note 4, “Segments,” for additional information. ** Contains lease and loan/working capital financing arrangements which are not subject to the guidance on revenue from contracts with customers. Revenue by Geography Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Americas $ 8,450 $ 8,806 $ 16,617 $ 17,299 Europe/Middle East/Africa 5,695 6,149 11,212 11,876 Asia Pacific 3,977 4,205 7,865 8,167 Total $ 18,123 $ 19,161 $ 35,694 $ 37,342 Remaining Performance Obligations The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-Service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency. At June 30, 2020, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was $117 billion. Given the profile of contract terms, approximately 60 percent of this amount is expected to be recognized as revenue over the next two years, approximately 35 percent between three Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods For the three and six months ended June 30, 2020, revenue was reduced by $56 million and $54 million, respectively, for performance obligations satisfied (or partially satisfied) in previous periods mainly due to changes in estimates on percentage-of-completion based contracts. Contract Balances The following table provides information about notes and accounts receivables — trade, contract assets and deferred income balances: At June 30, At December 31, (Dollars in millions) 2020 2019 Notes and accounts receivable — trade (net of allowances of $369 and $299 at June 30, 2020 and December 31, 2019, respectively) $ 6,543 $ 7,870 Contract assets (1) 505 492 Deferred income (current) 12,469 12,026 Deferred income (noncurrent) 3,787 3,851 (1) Included within prepaid expenses and other current assets in the Consolidated Balance Sheet. The amount of revenue recognized during the three and six months ended June 30, 2020 that was included within the deferred income balance at March 31, 2020 and December 31, 2019 was $4.5 billion and $6.5 billion, respectively, and was primarily related to services and software. The following table provides roll forwards of the notes and accounts receivable – trade allowance for credit losses for the six months ended June 30, 2020 and the year ended December 31, 2019: (Dollars in millions) January 1, 2020* Additions / (Releases) Write-offs Other June 30, 2020 $ 316 $ 87 $ (26) $ (8) $ 369 January 1, 2019 Additions / (Releases) Write-offs Other December 31, 2019 $ 309 $ 98 $ (113) $ 5 $ 299 * Opening balance does not equal the allowance at December 31, 2019 due to the adoption of the guidance for current expected credit losses. Refer to note 2, “Accounting Changes,” for additional information . ** Primarily represents translation adjustments . The contract assets allowance for credit losses was not material in any of the periods presented.

Segments

Segments	6 Months Ended
Segments	Jun. 30, 2020
Segments
Segments	4. Segments: During the first quarter of 2020, the company realigned offerings and the related management system to reflect divestitures completed in the second half of 2019 and tighter integration of certain industry-related consulting services. Accordingly, the company updated its Cloud & Cognitive Software segment, Global Business Services segment and the Other – divested businesses category in the first quarter of 2020 and recast the related historical information for consistency with the go-forward performance. Total recast revenue for full-year 2019 was approximately $0.3 billion of IBM’s total $77 billion. There was no change to the Global Technology Services, Systems or Global Financing segments, and there was no impact to IBM’s consolidated results. The following table displays the segment updates: Management System Change Resulting Segment Implications Divestitures of IBM's Risk Analytics and Regulatory Offerings and Sales Performance Management Offerings - Cloud & Cognitive Software (Cognitive Applications) + Other Divested Business Realignment of certain industry-related consulting offerings to the Global Business Services segment - Cloud & Cognitive Software (Cognitive Applications) + Global Business Services (Consulting) SEGMENT INFORMATION Cloud & Global Global Cognitive Business Technology Global Total (Dollars in millions) Software Services Services Systems Financing Segments For the three months ended June 30, 2020: External revenue $ 5,748 $ 3,890 $ 6,316 $ 1,852 $ 265 $ 18,072 Internal revenue 743 55 304 240 241 1,582 Total revenue $ 6,491 $ 3,945 $ 6,621 $ 2,092 $ 506 $ 19,655 Pre-tax income from continuing operations $ 1,708 $ 362 $ 250 $ 248 $ 176 $ 2,744 Revenue year-to-year change 5.2 % (7.5) % (7.3) % 8.7 % (20.0) % (2.4) % Pre-tax income year-to-year change (14.9) % 25.1 % 6.4 % 304.8 % (26.2) % (3.1) % Pre-tax income margin 26.3 % 9.2 % 3.8 % 11.8 % 34.9 % 14.0 % For the three months ended June 30, 2019: External revenue $ 5,563 * $ 4,197 * $ 6,837 $ 1,753 $ 351 $ 18,701 * Internal revenue 607 69 302 171 281 1,430 Total revenue $ 6,170 * $ 4,266 * $ 7,139 $ 1,924 $ 632 $ 20,131 * Pre-tax income from continuing operations $ 2,007 * $ 290 * $ 235 $ 61 $ 239 $ 2,832 * Pre-tax income margin 32.5 %* 6.8 %* 3.3 % 3.2 % 37.8 % 14.1 %* Reconciliations to IBM as Reported: (Dollars in millions) For the three months ended June 30: 2020 2019 Revenue: Total reportable segments $ 19,655 $ 20,131 * Other—divested businesses 13 403 * Other revenue 37 57 Eliminations of internal transactions (1,582) (1,430) Total consolidated revenue $ 18,123 $ 19,161 Pre-tax income from continuing operations: Total reportable segments $ 2,744 $ 2,832 * Amortization of acquired intangible assets (472) (169) Acquisition-related (charges)/income (1) (102) Non-operating retirement-related (costs)/income (273) (136) Eliminations of internal transactions (121) (60) Other—divested businesses (22) 561 * Unallocated corporate amounts (283) (156) Total pre-tax income from continuing operations $ 1,571 $ 2,768 * Recast to conform to current period presentation. SEGMENT INFORMATION Cloud & Global Global Cognitive Business Technology Global Total (Dollars in millions) Software Services Services Systems Financing Segments For the six months ended June 30, 2020: External revenue $ 10,987 $ 8,027 $ 12,783 $ 3,220 $ 564 $ 35,581 Internal revenue 1,556 101 599 388 453 3,096 Total revenue $ 12,543 $ 8,128 $ 13,382 $ 3,608 $ 1,017 $ 38,677 Pre-tax income from continuing operations $ 2,641 $ 633 $ 72 $ 31 $ 370 $ 3,747 Revenue year-to-year change 4.7 % (4.3) % (6.4) % 5.7 % (24.0) % (2.2) % Pre-tax income year-to-year change (30.4) % 7.8 % (85.9) % nm (29.8) % (29.0) % Pre-tax income margin 21.1 % 7.8 % 0.5 % 0.9 % 36.4 % 9.7 % For the six months ended June 30, 2019: External revenue $ 10,530 * $ 8,353 * $ 13,711 $ 3,081 $ 757 $ 36,432 * Internal revenue 1,448 143 591 334 581 3,097 Total revenue $ 11,978 * $ 8,495 * $ 14,303 $ 3,415 $ 1,338 $ 39,529 * Pre-tax income/(loss) from continuing operations $ 3,792 * $ 587 * $ 510 $ (141) $ 527 $ 5,276 * Pre-tax income/(loss) margin 31.7 %* 6.9 %* 3.6 % (4.1) % 39.4 % 13.3 %* Reconciliations to IBM as Reported: (Dollars in millions) For the six months ended June 30: 2020 2019 Revenue: Total reportable segments $ 38,677 $ 39,529 * Other—divested businesses 32 780 * Other revenue 81 131 Eliminations of internal transactions (3,096) (3,097) Total consolidated revenue $ 35,694 $ 37,342 Pre-tax income from continuing operations: Total reportable segments $ 3,747 $ 5,276 * Amortization of acquired intangible assets (945) (343) Acquisition-related (charges)/income (2) (141) Non-operating retirement-related (costs)/income (538) (274) Eliminations of internal transactions (176) (149) Other—divested businesses 3 505 * Unallocated corporate amounts (568) (224) Total pre-tax income from continuing operations $ 1,522 $ 4,651 * Recast to conform to current period presentation. nm - not meaningful

Acquisitions_Divestitures

Acquisitions/Divestitures	6 Months Ended
Acquisitions/Divestitures	Jun. 30, 2020
Acquisitions/Divestitures
Acquisitions/Divestitures	5. Acquisitions & Divestitures: Acquisitions Purchase price consideration for all acquisitions was paid primarily in cash. All acquisitions, except otherwise stated were for 100 percent of the acquired business and are reported in the Consolidated Statement of Cash Flows, net of acquired cash and cash equivalents. During the six months ended June 30, 2020, the company completed two acquisitions in the Cloud & Cognitive Software segment. One acquisition was completed in the second quarter of 2020, and one acquisition was completed in the first quarter of 2020. These acquisitions did not have a material impact in the Consolidated Financial Statements. On July 9, 2019, the company completed the acquisition of all On the acquisition date, Red Hat shareholders received $190 per share in cash, representing a total equity value of approximately $34 billion. The company funded the transaction through a combination of cash on hand and proceeds from debt issuances. The following table reflects the purchase price and the resulting purchase price allocation as of June 30, 2020. The net purchase price adjustment recorded in the second-quarter 2020 was related to noncurrent tax assets and liabilities. Amortization Allocated (Dollars in millions) Life (in years) Amount Current assets* $ 3,186 Property, plant and equipment/noncurrent assets 948 Intangible assets: Goodwill N/A 22,986 Client relationships 10 7,215 Completed technology 9 4,571 Trademarks 20 1,686 Total assets acquired $ 40,592 Current liabilities** 1,395 Noncurrent liabilities 4,117 Total liabilities assumed $ 5,513 Total purchase price $ 35,080 * Includes $2.2 billion of cash and cash equivalents. ** Includes $485 million of short-term debt related to the convertible notes acquired from Red Hat that were recognized at their fair value on the acquisition date, which was fully settled as of October 1, 2019. N/A – not applicable The goodwill generated is primarily attributable to the assembled workforce of Red Hat and the increased synergies expected to be achieved from the integration of Red Hat products into the company’s various integrated solutions neither of which qualify as an amortizable intangible asset. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 10.9 years. These identified intangible assets will be amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time. The following table presents the goodwill allocated to the segments as of June 30, 2020. (Dollars in billions) Goodwill Segment Allocated* Cloud & Cognitive Software $ 18.4 Global Technology Services 3.1 Global Business Services 1.1 Systems 0.4 Total $ 23.0 * It is expected that approximately six percent of the goodwill will be deductible for tax purposes. Divestitures Select IBM Software Products The company received cash of $812 million at closing and $40 million of contingent consideration in the third quarter of 2019. In the second quarter of 2020, HCL remitted $812 million of cash to the company, of which receivables of $165 million had been previously transferred as a participating interest to a third-party bank in the first quarter of 2020. Any earned outstanding contingent consideration is expected to be paid to IBM within 27 months of the closing. In addition, IBM remits payment to HCL predominantly for servicing certain customer contracts until such contracts are terminated or entitlements are assumed by HCL, related to deferred revenue that existed prior to closing. IBM made cash payments to HCL of $81 million and $219 million during the three and six months ended June 30, 2020, respectively. Select IBM Marketing Platform and Commerce Offerings IBM is providing Centerbridge with IT transition services. All other contracted transition services have concluded as of June 30, 2020. A subsequent closing occurred in most other countries on March 31, 2020. The closing of all remaining countries occurred as of June 30, 2020. The pre-tax gain recognized on this transaction as of June 30, 2020 was $75 million, and was not material to the consolidated financial results in any quarter. The pre-tax gain is subject to adjustment in the future due to changes in transaction-related estimates which are not expected to be material. IBM Risk Analytics and Regulatory Offerings – Sales Performance Management Offerings – The above divested businesses are reported in Other–divested businesses as described in note 4, "Segments." The pre-tax gains recognized on the divestitures above were recorded in other (income) and expense in the Consolidated Income Statement.

Earnings Per Share of Common St

Earnings Per Share of Common Stock	6 Months Ended
Earnings Per Share of Common Stock	Jun. 30, 2020
Earnings Per Share of Common Stock
Earnings Per Share of Common Stock	6. Earnings Per Share of Common Stock The following tables provide the computation of basic and diluted earnings per share of common stock for the three and six months ended June 30, 2020 and 2019. For the Three Months Ended June 30, 2020 June 30, 2019 Number of shares on which basic earnings per share is calculated: Weighted-average shares outstanding during period 889,435,166 886,273,682 Add — Incremental shares under stock-based compensation plans 4,290,365 3,281,570 Add — Incremental shares associated with contingently issuable shares 1,213,549 1,276,549 Number of shares on which diluted earnings per share is calculated 894,939,080 890,831,801 Income from continuing operations (millions) $ 1,362 $ 2,499 Income/(loss) from discontinued operations, net of tax (millions) (1) (1) Net income on which basic earnings per share is calculated (millions) $ 1,361 $ 2,498 Income from continuing operations (millions) $ 1,362 $ 2,499 Net income applicable to contingently issuable shares (millions) — 0 Income from continuing operations on which diluted earnings per share is calculated (millions) $ 1,362 $ 2,500 Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated (millions) (1) (1) Net income on which diluted earnings per share is calculated (millions) $ 1,361 $ 2,499 Earnings/(loss) per share of common stock: Assuming dilution Continuing operations $ 1.52 $ 2.81 Discontinued operations 0.00 0.00 Total $ 1.52 $ 2.81 Basic Continuing operations $ 1.53 $ 2.82 Discontinued operations 0.00 0.00 Total $ 1.53 $ 2.82 Stock options to purchase 1,511,989 shares and 762,019 shares were outstanding as of June 30, 2020 and 2019, respectively, but were not included in the computation of diluted earnings per share because the options' exercise price during the respective period was greater than the average market price of the common shares, and, therefore, the effect would have been antidilutive. For the Six Months Ended June 30, 2020 June 30, 2019 Number of shares on which basic earnings per share is calculated: Weighted-average shares outstanding during period 888,702,256 887,927,612 Add — Incremental shares under stock-based compensation plans 5,015,390 3,327,015 Add — Incremental shares associated with contingently issuable shares 1,271,513 1,116,537 Number of shares on which diluted earnings per share is calculated 894,989,159 892,371,164 Income from continuing operations (millions) $ 2,538 $ 4,093 Income/(loss) from discontinued operations, net of tax (millions) (2) (4) Net income on which basic earnings per share is calculated (millions) $ 2,536 $ 4,089 Income from continuing operations (millions) $ 2,538 $ 4,093 Net income applicable to contingently issuable shares (millions) (2) 0 Income from continuing operations on which diluted earnings per share is calculated (millions) $ 2,536 $ 4,093 Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated (millions) (2) (4) Net income on which diluted earnings per share is calculated (millions) $ 2,534 $ 4,090 Earnings/(loss) per share of common stock: Assuming dilution Continuing operations $ 2.83 $ 4.58 Discontinued operations 0.00 0.00 Total $ 2.83 $ 4.58 Basic Continuing operations $ 2.85 $ 4.61 Discontinued operations 0.00 0.00 Total $ 2.85 $ 4.61 Stock options to purchase 1,324,444 shares and 949,519 shares (average of first and second quarter share amounts) were outstanding as of June 30, 2020 and 2019, respectively, but were not included in the computation of diluted earnings per share because the options' exercise price during the respective period was greater than the average market price of the common shares, and, therefore, the effect would have been antidilutive.

Financial Assets & Liabilities

Financial Assets & Liabilities	6 Months Ended
Financial Assets & Liabilities	Jun. 30, 2020
Financial Assets & Liabilities
Financial Assets & Liabilities	7. Financial Assets & Liabilities : Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The company classifies certain assets and liabilities based on the following fair value hierarchy: ● Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date; ● Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and ● Level 3—Unobservable inputs for the asset or liability. When available, the company uses unadjusted quoted market prices in active markets to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation. The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument. In determining the fair value of financial instruments, the company considers certain market valuation adjustments to the “base valuations” calculated using the methodologies described below for several parameters that market participants would consider in determining fair value: ● Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument. ● Credit risk adjustments are applied to reflect the company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the company’s own credit risk as observed in the credit default swap market. The company holds investments primarily in time deposits, certificates of deposit, and U.S. government debt that are designated as available-for-sale. The primary objective of the company’s cash and debt investment portfolio is to maintain principal by investing in very liquid and highly rated investment grade securities. Available-for-sale securities are measured for impairment on a recurring basis by comparing the security’s fair value with its amortized cost basis. Effective January 1, 2020 with the adoption of the new standard on credit losses, if the fair value of the security falls below its amortized cost basis, the change in fair value is recognized in the period the impairment is identified when the loss is due to credit factors. The change in fair value due to non-credit factors is recorded in other comprehensive income when the company does not intend to sell and has the ability to hold the investment. The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. There were no impairments for credit losses or non-credit impairments for the three and six months ended June 30, 2020. Prior to the adoption of the new standard, available-for-sale securities were measured for impairment using an other-than-temporary impairment model. No impairment was recorded for the three and six months ended June 30, 2019. Certain nonfinancial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for nonfinancial assets depend on the type of asset. There were no material impairments of nonfinancial assets for the six months ended June 30, 2020 and 2019, respectively. The following table presents the company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at June 30, 2020 and December 31, 2019. Fair Value Hierarchy At June 30, 2020 At December 31, 2019 (Dollars in millions) Level Assets (7) Liabilities (8) Assets (7) Liabilities (8) Cash equivalents (1) Time deposits and certificates of deposit (2) 2 $ 7,785 $ N/A $ 4,392 $ N/A Money market funds 1 926 N/A 427 N/A Total cash equivalents $ 8,712 $ N/A $ 4,819 $ N/A Equity investments (3) 1 0 N/A 0 N/A Debt securities-current (2)(4) 2 2,063 N/A 696 N/A Debt securities-noncurrent (2)(5) 2 22 N/A 65 N/A Derivatives designated as hedging instruments Interest rate contracts 2 126 — 56 — Foreign exchange contracts 2 161 468 175 635 Derivatives not designated as hedging instruments Foreign exchange contracts 2 8 18 10 33 Equity contracts (6) 1,2 11 4 1 4 Total $ 11,104 $ 491 $ 5,823 $ 673 (1) Included within cash and cash equivalents in the Consolidated Balance Sheet. (2) Available-for-sale securities with an amortized cost basis that approximates fair value. (3) Included within investments and sundry assets in the Consolidated Balance Sheet. (4) Primarily includes time deposits and U.S. treasury bills that are reported within marketable securities in the Consolidated Balance Sheet. (5) Primarily includes corporate debt securities with a maximum maturity of two years that are reported within investments and sundry assets in the Consolidated Balance Sheet. (6) Level 1 includes immaterial amounts related to equity futures contracts. (7) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Balance Sheet at June 30, 2020 were $195 million and $112 million, respectively, and at December 31, 2019 were $149 million and $94 million, respectively. (8) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Balance Sheet at June 30, 2020 were $289 million and $202 million, respectively, and at December 31, 2019 were $167 million and $506 million , respectively. N/A – not applicable Financial Assets and Liabilities Not Measured at Fair Value Short-Term Receivables and Payables Notes and other accounts receivable and other investments are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt (excluding the current portion of long-term debt and including short-term finance lease liabilities) are financial liabilities with carrying values that approximate fair value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt which would be classified as Level 2. Loans and Long-Term Receivables Fair values are based on discounted future cash flows using current interest rates offered for similar loans to clients with similar credit ratings for the same remaining maturities. At June 30, 2020 and December 31, 2019, the difference between the carrying amount and estimated fair value for loans and long-term receivables was immaterial. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy. Long-Term Debt Fair value of publicly-traded long-term debt is based on quoted market prices for the identical liability when traded as an asset in an active market. For other long-term debt (including long-term finance lease liabilities) for which a quoted market price is not available, an expected present value technique that uses rates currently available to the company for debt with similar terms and remaining maturities is used to estimate fair value. The carrying amount of long-term debt was $55,449 million and $54,102 million, and the estimated fair value was $61,600 million and $58,431 million at June 30, 2020 and December 31, 2019, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy.

Financing Receivables

Financing Receivables	6 Months Ended
Financing Receivables	Jun. 30, 2020
Financing Receivables
Financing Receivables	8. Financing Receivables: Financing receivables primarily consist of client loan and installment payment receivables (loans) and investment in sales-type and direct financing leases (collectively referred to as client financing receivables) and commercial financing receivables. Loans are provided primarily to clients to finance the purchase of hardware, software and services. Payment terms on these financing arrangements are generally for terms up to seven years. Investment in sales-type and direct financing leases relate principally to the company’s Systems products and are for terms ranging generally from two 30 Effective January 1, 2020, the company adopted the new accounting standard related to credit losses, using the transition methodology whereby prior comparative periods were not retrospectively presented in the Consolidated Financial Statements. Refer to note 2, “Accounting Changes,” for additional information. Under this new guidance, the amortized cost basis of a financial asset represents the original amount of the financing receivable (including residual value) adjusted for unearned income, deferred initial direct costs, cash collected, write-offs and any foreign exchange adjustments. The allowance for credit losses represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. Prior to the effective date, financing receivables were measured at recorded investment, which does not include residual value. As a result, all prior periods are presented at recorded investment, while current period information is presented at amortized cost. Additionally, current period information reflects updates to the portfolio segments, and other presentation changes within the following tables, as a result of the adoption of this new guidance. A summary of the components of the company’s financing receivables is presented as follows: Client Financing Receivables Client Loan and Investment in Installment Payment Sales-Type and Commercial (Dollars in millions) Receivables Direct Financing Financing At June 30, 2020: (Loans) Leases Receivables Total Financing receivables, gross $ 12,539 $ 4,967 $ 2,393 $ 19,898 Unearned income (506) (393) (3) (903) Residual value* — 586 — 586 Amortized cost $ 12,033 $ 5,160 $ 2,389 $ 19,582 Allowance for credit losses (164) (89) (11) (264) Total financing receivables, net $ 11,869 $ 5,070 $ 2,379 $ 19,318 Current portion $ 7,501 $ 2,087 $ 2,379 $ 11,967 Noncurrent portion $ 4,368 $ 2,983 $ — $ 7,351 * Includes guaranteed and unguaranteed residual value. Client Financing Receivables Client Loan and Investment in Installment Payment Sales-Type and Commercial (Dollars in millions) Receivables Direct Financing Financing At December 31, 2019: (Loans) Leases Receivables Total Financing receivables, gross $ 13,592 $ 6,077 $ 3,836 $ 23,504 Unearned income (570) (509) (4) (1,083) Recorded investment $ 13,022 $ 5,567 $ 3,831 $ 22,421 Allowance for credit losses (138) (72) (11) (221) Unguaranteed residual value — 652 — 652 Guaranteed residual value — 53 — 53 Total financing receivables, net $ 12,884 $ 6,199 $ 3,820 $ 22,904 Current portion $ 8,037 $ 2,334 $ 3,820 $ 14,192 Noncurrent portion $ 4,847 $ 3,865 $ — $ 8,712 The company has a long-standing practice of taking mitigation actions, in certain circumstances, to transfer credit risk to third parties. These actions may include credit insurance, financial guarantees, nonrecourse borrowings, transfers of receivables recorded as true sales in accordance with accounting guidance or sales of equipment under operating lease. Financing receivables pledged as collateral for borrowings were $758 million and $1,062 million at June 30, 2020 and December 31, 2019, respectively. In the second quarter of 2020, the company sold $711 million of financing receivables, consisting of lease and loan receivables of $417 million and $294 million, respectively, approximately half of which were scheduled to be due within the next 12 months. The transfer of these receivables qualified as true sales and therefore reduced Global Financing receivables and resulted in a benefit to cash flows from operating activities. The impact to the Consolidated Income Statement, including fees and net gain associated with the transfer of these receivables was not material. The company did not have any financing receivables held for sale as of June 30, 2020 and December 31, 2019. Allowance for Credit Losses – Financing Receivables Refer to note A, “Significant Accounting Policies,” in the company’s 2019 Annual Report for a full description of its accounting policies for trade and financing receivables, contract assets and related allowances. The descriptions below include any changes to those policies due to the new standard. Effective with the adoption of the new credit losses standard, the company’s estimates of its allowances for expected credit losses include consideration of: past events, including any historical default, historical concessions and resulting troubled debt restructurings, current economic conditions, taking into account any non-freestanding mitigating credit enhancements and certain forward-looking information, including reasonable and supportable forecasts. Collectively Evaluated Financing Receivables The company determines its allowance for credit losses based on two portfolio segments: client financing receivables and commercial financing receivables, and further segments the portfolio into three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. For client financing receivables, the company uses a credit loss model to calculate allowances based on its internal loss experience and current conditions and forecasts, by class of financing receivable. The company records an unallocated reserve that is calculated by applying a reserve rate to its portfolio, excluding accounts that have been individually evaluated and specifically reserved. This reserve rate is based upon credit rating, probability of default, term and loss history. The allowance is adjusted quarterly for expected recoveries of amounts that were previously written off or are expected to be written off. Recoveries cannot exceed the aggregated amount of the previous write-off or expected write-off. Macroeconomic variables attributed to the expected credit losses for client financing receivables may vary by class of financing receivables based on historical experiences, portfolio composition and current environment. In addition to a qualitative review of credit risk factors across the portfolio, the company considers forward-looking macroeconomic variables such as gross domestic product, unemployment rates, equity prices and corporate profits when quantifying the impact of economic forecasts on its client financing receivables allowance for expected credit losses. The company also considers the impact of current conditions and economic forecasts relating to specific industries, geographical areas, and client-specific exposures on the portfolio. Under this approach, forecasts of these variables over two years are considered reasonable and supportable. Beyond two years, the company reverts to long-term average loss experience. Forward-looking estimates require the use of judgment, particularly in times of economic uncertainty. Consistent with the first quarter of 2020, with evolving global impacts from the COVID-19 pandemic, external economic models have been revised with increased frequency and with alternative scenarios. The company’s allowances at June 30, 2020, reflect the qualitative process described above. Any changes to economic models that occurred after the balance sheet date will be reflected in future periods. The allowance for commercial financing receivables is estimated based on a combination of write-off history and current economic conditions, excluding any individually evaluated accounts. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material. At January 1, 2020, upon adoption of the new standard, the company recorded an additional allowance for client and commercial financing receivables (including related off-balance sheet commitments) of $64 million. This was primarily driven by an increase in the client financing receivables allowance. Refer to note 12, “Commitments,” for additional information regarding off-balance sheet commitments. Client Financing Receivables The following tables present the amortized cost basis or recorded investment for client financing receivables at June 30, 2020 and December 31, 2019, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. (Dollars in millions) At June 30, 2020: Americas EMEA Asia Pacific Total Amortized cost $ 9,060 $ 4,932 $ 3,201 $ 17,192 Allowance for credit losses Beginning balance at December 31, 2019 $ 120 $ 54 $ 36 $ 210 Adjustment for adoption of new standard 21 15 5 41 Beginning balance at January 1, 2020 $ 142 $ 69 $ 41 $ 252 Write-offs $ (17) $ (1) $ (2) $ (21) Recoveries 0 0 2 2 Additions/(releases) 28 9 (2) 34 Other* (13) 0 (1) (14) Ending balance at June 30, 2020 $ 140 $ 76 $ 37 $ 253 * Primarily represents translation adjustments. (Dollars in millions) At December 31, 2019: Americas EMEA Asia Pacific Total Recorded investment Lease receivables $ 3,419 $ 1,186 $ 963 $ 5,567 Loan receivables 6,726 3,901 2,395 13,022 Ending balance $ 10,144 $ 5,087 $ 3,359 $ 18,590 Recorded investment collectively evaluated for impairment $ 10,032 $ 5,040 $ 3,326 $ 18,399 Recorded investment individually evaluated for impairment $ 112 $ 47 $ 32 $ 191 Allowance for credit losses Beginning balance at January 1, 2019 Lease receivables $ 53 $ 22 $ 24 $ 99 Loan receivables 105 43 32 179 Total $ 158 $ 65 $ 56 $ 279 Write-offs $ (42) $ (3) $ (18) $ (63) Recoveries 1 0 1 2 Additions/(releases) 5 (7) (3) (5) Other* (1) 0 (1) (2) Ending balance at December 31, 2019 $ 120 $ 54 $ 36 $ 210 Lease receivables $ 33 $ 23 $ 16 $ 72 Loan receivables $ 88 $ 31 $ 20 $ 138 Related allowance, collectively evaluated for impairment $ 25 $ 11 $ 4 $ 39 Related allowance, individually evaluated for impairment $ 96 $ 43 $ 32 $ 171 * Primarily represents translation adjustments. Write-offs of lease receivables and loan receivables were $16 million and $47 million, respectively, for the year ended December 31, 2019. Provisions for credit losses recorded for lease receivables and loan receivables were a release of $6 million and an addition of $2 million, respectively, for the year ended December 31, 2019. Past Due Financing Receivables The company considers a client’s financing receivable balance past due when any installment is aged over 90 days. The following tables summarize information about the amortized cost basis or recorded investment in client financing receivables, including amortized cost or recorded investment aged over 90 days and still accruing, billed invoices aged over 90 days and still accruing, and amortized cost or recorded investment not accruing. Amortized Billed Total Amortized Cost Invoices Amortized (Dollars in millions) Amortized Cost > 90 Days and > 90 Days and Cost Not At June 30, 2020: Cost > 90 Days (1) Accruing (1) Accruing Accruing (2) Americas $ 9,060 $ 323 $ 231 $ 30 $ 111 EMEA 4,932 115 31 5 89 Asia Pacific 3,201 48 20 4 29 Total client financing receivables $ 17,192 $ 486 $ 283 $ 38 $ 229 (1) At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. (2) Of the amortized cost not accruing, there is a related allowance of $171 million. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2020, respectively. Recorded Billed Recorded Total Recorded Investment Invoices Investment (Dollars in millions) Recorded Investment > 90 Days and > 90 Days and Not At December 31, 2019: Investment > 90 Days (1) Accruing (1) Accruing Accruing (2) Americas $ 3,419 $ 187 $ 147 $ 11 $ 41 EMEA 1,186 28 13 2 17 Asia Pacific 963 19 7 1 11 Total lease receivables $ 5,567 $ 234 $ 168 $ 14 $ 69 Americas $ 6,726 $ 127 $ 71 $ 11 $ 72 EMEA 3,901 77 8 3 72 Asia Pacific 2,395 26 6 2 21 Total loan receivables $ 13,022 $ 231 $ 85 $ 15 $ 166 Total $ 18,590 $ 465 $ 253 $ 29 $ 235 (1) At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. (2) Of the recorded investment not accruing, $191 million is individually evaluated for impairment with a related allowance of $171 million. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2019, respectively. Credit Quality Indicators The company’s credit quality indicators, which are based on rating agency data, publicly available information and information provided by customers, are reviewed periodically based on the relative level of risk. The resulting indicators are a numerical rating system that maps to Moody’s Investors Service credit ratings as shown below. The company uses information provided by Moody’s, where available, as one of many inputs in its determination of customer credit ratings. The credit quality of the customer is evaluated based on these indicators and is assigned the same risk rating whether the receivable is a lease or a loan. The following tables present the amortized cost basis or recorded investment for client financing receivables by credit quality indicator at June 30, 2020 and December 31, 2019, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. Effective January 1, 2020, under the new guidance for credit losses, the company discloses its credit quality by year of origination. Additionally, under the new guidance, the amortized cost is presented on a gross basis, whereas under the prior guidance, the company presented the recorded investment net of the allowance for credit losses. At June 30, 2020, the credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduces the risk to IBM. (Dollars in millions) Americas EMEA Asia Pacific At June 30, 2020: Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Vintage year: 2020 $ 1,556 $ 1,185 $ 925 $ 1,062 $ 548 $ 273 2019 2,076 1,187 922 836 719 271 2018 1,173 608 403 328 498 221 2017 582 257 107 170 266 77 2016 144 95 52 65 176 48 2015 and prior 57 140 37 27 80 24 Total $ 5,588 $ 3,472 $ 2,444 $ 2,487 $ 2,287 $ 914 (Dollars in millions) Lease Receivables Loan Receivables At December 31, 2019: Americas EMEA Asia Pacific Americas EMEA Asia Pacific Credit rating: Aaa – Aa3 $ 465 $ 54 $ 43 $ 1,028 $ 193 $ 189 A1 – A3 750 181 454 1,186 395 892 Baa1 – Baa3 955 409 147 1,882 1,527 619 Ba1 – Ba2 746 326 154 1,513 921 388 Ba3 – B1 215 140 101 471 564 205 B2 – B3 242 50 47 522 253 72 Caa – D 13 2 2 36 18 10 Total $ 3,385 $ 1,162 $ 947 $ 6,638 $ 3,871 $ 2,376 Troubled Debt Restructurings The company did not have any significant troubled debt restructurings during the six months ended June 30, 2020 or for the year ended December 31, 2019.

Leases

Leases	6 Months Ended
Leases	Jun. 30, 2020
Leases
Leases	9. Leases: Accounting for leases as a lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity: Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Lease income — sales-type and direct financing leases Sales-type lease selling price $ 368 $ 179 $ 579 $ 328 Less: Carrying value of underlying assets* 117 74 194 129 Gross profit $ 251 $ 105 $ 385 $ 199 Interest income on lease receivables 65 73 139 151 Total sales-type and direct financing lease income $ 316 $ 178 $ 524 $ 350 Lease income — operating leases 68 82 139 172 Variable lease income 27 9 58 27 Total lease income $ 411 $ 269 $ 721 $ 548 * Excludes unguaranteed residual value.

Intangible Assets Including Goo

Intangible Assets Including Goodwill	6 Months Ended
Intangible Assets Including Goodwill	Jun. 30, 2020
Intangible Assets Including Goodwill
Intangible Assets Including Goodwill	10. Intangible Assets Including Goodwill: Intangible Assets The following table presents the company's intangible asset balances by major asset class: At June 30, 2020 Gross Carrying Accumulated Net Carrying (Dollars in millions) Amount Amortization Amount* Intangible asset class Capitalized software $ 1,759 $ (776) $ 983 Client relationships 8,665 (1,665) 7,000 Completed technology 5,964 (1,466) 4,498 Patents/trademarks 2,213 (445) 1,768 Other** 56 (35) 20 Total $ 18,656 $ (4,387) $ 14,270 At December 31, 2019 Gross Carrying Accumulated Net Carrying (Dollars in millions) Amount Amortization Amount* Intangible asset class Capitalized software $ 1,749 $ (743) $ 1,006 Client relationships 8,921 (1,433) 7,488 Completed technology 6,261 (1,400) 4,861 Patents/trademarks 2,301 (445) 1,856 Other** 56 (31) 24 Total $ 19,287 $ (4,052) $ 15,235 * Amounts as of June 30, 2020 and December 31, 2019 include a decrease in net intangible asset balances of $6 million and $42 million, respectively, due to foreign currency translation. Other intangibles are primarily acquired proprietary and non-proprietary business processes, methodologies and systems . The net carrying amount of intangible assets decreased $965 million during the first six months of 2020, primarily due to intangible asset amortization, partially offset by additions of capitalized software. The aggregate intangible amortization expense was $623 million and $1,245 million for the second quarter and first six months of 2020, respectively, versus $307 million and $610 million for the second quarter and first six months of 2019, respectively. The increase in intangible amortization expense was primarily due to an increase in the gross carrying amount of intangible assets from the Red Hat acquisition which closed in the third quarter of 2019. In addition, in the first six months of 2020, the company retired $913 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount. The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet is estimated to be the following at June 30, 2020: Capitalized Acquired (Dollars in millions) Software Intangibles Total Remainder of 2020 $ 288 $ 905 $ 1,193 2021 445 1,748 2,193 2022 215 1,686 1,901 2023 35 1,373 1,407 2024 0 1,323 1,323 Thereafter — 6,251 6,251 Goodwill The changes in the goodwill balances by segment for the six months ended June 30, 2020 and for the year ended December 31, 2019 are as follows: Foreign Currency Purchase Translation (Dollars in millions) Balance Goodwill Price And Other Balance Segment 1/1/2020 Additions Adjustments Divestitures Adjustments 6/30/2020 Cloud & Cognitive Software $ 43,037 $ 11 $ (139) $ — $ (147) $ 42,762 Global Business Services 5,775 — — — (45) 5,730 Global Technology Services 7,141 — — — (61) 7,080 Systems 2,270 — — — (8) 2,261 Other—divested businesses — — — — — — Total $ 58,222 $ 11 $ (139) $ — $ (260) $ 57,833 Foreign Currency Purchase Translation (Dollars in millions) Balance Goodwill Price And Other Balance Segment 1/1/2019 Additions Adjustments Divestitures Adjustments** 12/31/2019 Cloud & Cognitive Software* $ 24,463 $ 18,399 $ 133 $ — $ 41 $ 43,037 Global Business Services 4,711 1,059 1 (1) 5 5,775 Global Technology Services 3,988 3,119 — — 34 7,141 Systems 1,847 525 (110) — 7 2,270 Other—divested businesses* 1,256 — — (1,256) — — Total $ 36,265 $ 23,102 $ 24 $ (1,257) $ 87 $ 58,222 * Recast to conform to 2020 presentation. ** Primarily driven by foreign currency translation. There were no goodwill impairment losses recorded during the first six months of 2020 or full year 2019 and the company has no accumulated impairment losses. Purchase price adjustments recorded in the first six months of 2020 and full year 2019 were related to acquisitions that were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. During the first six months of 2020, net purchase price adjustments recorded to noncurrent tax assets and liabilities were related to the Red Hat acquisition. Net purchase price adjustments recorded in full-year 2019 were not material.

Borrowings

Borrowings	6 Months Ended
Borrowings	Jun. 30, 2020
Borrowings
Borrowings	11. Borrowings: Short-Term Debt At June 30, At December 31, (Dollars in millions) 2020 2019 Commercial paper $ 115 $ 304 Short-term loans 730 971 Long-term debt—current maturities 8,444 7,522 Total $ 9,289 $ 8,797 The weighted-average interest rate for commercial paper at June 30, 2020 and December 31, 2019 was 1.4 percent and 1.6 percent, respectively. The weighted-average interest rate for short-term loans was 5.0 percent and 6.1 percent at June 30, 2020 and December 31, 2019, respectively. Long-Term Debt Pre-Swap Borrowing Pre-Swap Borrowing Balance Balance (Dollars in millions) Maturities 6/30/2020 12/31/2019 U.S. dollar debt (weighted-average interest rate at June 30, 2020):* 2.2% 2020 $ 1,513 $ 4,326 1.6% 2021 5,536 8,498 2.6% 2022 6,246 6,289 3.3% 2023 2,403 2,388 3.3% 2024 5,041 5,045 6.6% 2025 654 636 3.3% 2026 4,350 4,350 3.0% 2027 2,219 969 6.5% 2028 313 313 3.5% 2029 3,250 3,250 2.0% 2030 1,350 — 5.9% 2032 600 600 8.0% 2038 83 83 4.5% 2039 2,745 2,745 2.9% 2040 650 — 4.0% 2042 1,107 1,107 7.0% 2045 27 27 4.7% 2046 650 650 4.3% 2049 3,000 3,000 3.0% 2050 750 — 7.1% 2096 316 316 $ 42,804 $ 44,594 Other currencies (weighted-average interest rate at June 30, 2020, in parentheses):* Euro (1.1%) 2020–2040 $ 18,545 $ 14,306 Pound sterling (2.7%) 2020–2022 1,301 1,390 Japanese yen (0.3%) 2022–2026 1,349 1,339 Other (3.1%) 2020–2022 203 375 $ 64,203 $ 62,003 Finance lease obligations (1.8%) 2021–2030 268 204 $ 64,470 $ 62,207 Less: net unamortized discount 892 881 Less: net unamortized debt issuance costs 165 142 Add: fair value adjustment** 480 440 $ 63,893 $ 61,624 Less: current maturities 8,444 7,522 Total $ 55,449 $ 54,102 * Includes notes, debentures, bank loans and secured borrowings. ** The portion of the company’s fixed-rate debt obligations that was hedged was reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates. The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted indebtedness of at least $500 million. The company is in compliance with its debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable. In the first half of 2019, the company issued an aggregate of $20 billion of U.S. dollar fixed- and floating-rate notes and $5.7 billion of Euro fixed-rate notes. The proceeds were primarily used for the acquisition of Red Hat. For additional information on this transaction, refer to note 5, “Acquisitions & Divestitures.” In the first half of 2020, the company issued an aggregate of $4.1 billion of Euro fixed-rate notes and $4.0 billion of U.S. dollar fixed-rate notes. The proceeds from the Euro issuance were primarily used to early redeem outstanding fixed-rate notes which were due in 2021 in the aggregate amount of $2.9 billion. The company incurred a loss of $49 million in the first quarter of 2020 upon redemption, which was recorded in other (income) and expense in the Consolidated Income Statement. Pre-swap annual contractual obligations of long-term debt outstanding at June 30, 2020, are as follows: (Dollars in millions) Total Remainder of 2020 $ 4,366 2021 6,937 2022 7,194 2023 5,417 2024 6,324 Thereafter 34,232 Total $ 64,470 Interest on Debt (Dollars in millions) For the six months ended June 30: 2020 2019 Cost of financing $ 237 $ 343 Interest expense 649 558 Interest capitalized 5 3 Total interest paid and accrued $ 891 $ 904 Lines of Credit On July 2, 2020, the company and IBM Credit LLC entered into a new $2.5 billion 364-day Credit Agreement to replace the existing $2.5 billion 364-day Credit Agreement, and also extended the maturity date of the existing $2.5 billion Three-Year Credit Agreement. The new maturity dates for the 364-day and Three-Year Credit Agreements are July 1, 2021 and July 20, 2023, respectively. The company also amended its $10.25 billion Five-Year Credit Agreement to include an option exercisable in 2021 to extend the current maturity date of July 20, 2024 by an additional two years. At June 30, 2020, there were no borrowings by the company, or its subsidiaries, under these credit facilities.

Commitments

Commitments	6 Months Ended
Commitments	Jun. 30, 2020
Commitments
Commitments	12. Commitments: The company’s extended lines of credit to third-party entities include unused amounts of $1.9 billion and $1.8 billion at June 30, 2020 and December 31, 2019, respectively. A portion of these amounts was available to the company’s business partners to support their working capital needs. In addition, the company has committed to provide future financing to its clients in connection with client purchase agreements for $5.7 billion and $6.3 billion at June 30, 2020 and December 31, 2019, respectively. Effective January 1, 2020, the company adopted the new standard on credit losses, which resulted in the recognition of a related allowance for non-cancellable off-balance sheet commitments. Refer to note 2, “Accounting Changes,” for additional information. The allowance for these commitments is recorded in other liabilities in the Consolidated Balance Sheet and was not material at June 30, 2020. The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note 8, “Financing Receivables,” for additional information. The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. The following is a description of arrangements in which the company is the guarantor. The company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the company, under which the company customarily agrees to hold the party harmless against losses arising from a breach of representations and covenants related to such matters as title to the assets sold, certain intellectual property rights, specified environmental matters, third-party performance of nonfinancial contractual obligations and certain income taxes. In each of these circumstances, payment by the company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, the procedures of which typically allow the company to challenge the other party’s claims. While typically indemnification provisions do not include a contractual maximum on the company’s payment, the company’s obligations under these agreements may be limited in terms of time and/or nature of claim, and in some instances, the company may have recourse against third parties for certain payments made by the company. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the company under these agreements have not had a material effect on the company’s business, financial condition or results of operations. In addition, the company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at June 30, 2020 and December 31, 2019 was not material. Changes in the company’s warranty liability for standard warranties, which are included in other accrued expenses and liabilities and other liabilities in the Consolidated Balance Sheet, and for extended warranty contracts, which are included in deferred income in the Consolidated Balance Sheet, are presented in the following tables. Standard Warranty Liability (Dollars in millions) 2020 2019 Balance at January 1 $ 113 $ 118 Current period accruals 43 45 Accrual adjustments to reflect actual experience (14) (1) Charges incurred (49) (59) Balance at June 30 $ 93 $ 103 Extended Warranty Liability (Dollars in millions) 2020 2019 Balance at January 1 $ 477 $ 533 Revenue deferred for new extended warranty contracts 93 81 Amortization of deferred revenue (115) (128) Other* (9) 0 Balance at June 30 $ 445 $ 486 Current portion $ 216 $ 225 Noncurrent portion $ 228 $ 260 * Other primarily consists of foreign currency translation adjustments.

Contingencies

Contingencies	6 Months Ended
Contingencies	Jun. 30, 2020
Contingencies
Contingencies	13. Contingencies: As a company with a substantial employee population and with clients in more than 175 countries, IBM is involved, either as plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. The company is a leader in the information technology industry and, as such, has been and will continue to be subject to claims challenging its IP rights and associated products and offerings, including claims of copyright and patent infringement and violations of trade secrets and other IP rights. In addition, the company enforces its own IP against infringement, through license negotiations, lawsuits or otherwise. Also, as is typical for companies of IBM’s scope and scale, the company is party to actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the company’s pension, retirement and other benefit plans), as well as actions with respect to contracts, product liability, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders and representatives of the locations in which the company does business. Some of the actions to which the company is party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise. The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the quarter ended June 30, 2020 were not material to the Consolidated Financial Statements. In accordance with the relevant accounting guidance, the company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the company also discloses matters based on its consideration of other matters and qualitative factors, including the experience of other companies in the industry, and investor, customer and employee relations considerations. With respect to certain of the claims, suits, investigations and proceedings discussed herein, the company believes at this time that the likelihood of any material loss is remote, given, for example, the procedural status, court rulings, and/or the strength of the company’s defenses in those matters. With respect to the remaining claims, suits, investigations and proceedings discussed in this note, except as specifically discussed herein, the company is unable to provide estimates of reasonably possible losses or range of losses, including losses in excess of amounts accrued, if any, for the following reasons. Claims, suits, investigations and proceedings are inherently uncertain, and it is not possible to predict the ultimate outcome of these matters. It is the company’s experience that damage amounts claimed in litigation against it are unreliable and unrelated to possible outcomes, and as such are not meaningful indicators of the company’s potential liability. Further, the company is unable to provide such an estimate due to a number of other factors with respect to these claims, suits, investigations and proceedings, including considerations of the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate), to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter. Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including: the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the Consolidated Financial Statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. While the company will continue to defend itself vigorously, it is possible that the company’s business, financial condition, results of operations or cash flows could be affected in any particular period by the resolution of one or more of these matters. The following is a summary of the more significant legal matters involving the company. The company is a defendant in an action filed on March 6, 2003 in state court in Salt Lake City, Utah by the SCO Group (SCO v. IBM). The company removed the case to Federal Court in Utah. Plaintiff is an alleged successor in interest to some of AT&T’s UNIX IP rights, and alleges copyright infringement, unfair competition, interference with contract and breach of contract with regard to the company’s distribution of AIX and Dynix and contribution of code to Linux and the company has asserted counterclaims. On September 14, 2007, plaintiff filed for bankruptcy protection, and all proceedings in this case were stayed. The court in another suit, the SCO Group, Inc. v. Novell, Inc., held a trial in March 2010. The jury found that Novell is the owner of UNIX and UnixWare copyrights; the judge subsequently ruled that SCO is obligated to recognize Novell’s waiver of SCO’s claims against IBM and Sequent for breach of UNIX license agreements. On August 30, 2011, the Tenth Circuit Court of Appeals affirmed the district court’s ruling and denied SCO’s appeal of this matter. In June 2013, the Federal Court in Utah granted SCO’s motion to reopen the SCO v. IBM case. In February 2016, the Federal Court ruled in favor of IBM on all of SCO’s remaining claims, and SCO appealed. On October 30, 2017, the Tenth Circuit Court of Appeals affirmed the dismissal of all but one of SCO’s remaining claims, which was remanded to the Federal Court in Utah. On March 9, 2017, the Commonwealth of Pennsylvania’s Department of Labor and Industry sued IBM in Pennsylvania state court regarding a 2006 contract for the development of a custom software system to manage the Commonwealth’s unemployment insurance benefits programs. The matter is pending in a Pennsylvania court. In December 2017, CIS General Insurance Limited (CISGIL) sued IBM UK regarding a contract entered into by IBM UK and CISGIL in 2015 to implement and operate an IT insurance platform. The contract was terminated by IBM UK in July 2017 for non-payment by CISGIL. CISGIL alleges wrongful termination, breach of contract and breach of warranty. The matter is pending in the London High Court with trial beginning in January 2020. In May 2015, a putative class action was commenced in the United States District Court for the Southern District of New York related to the company’s October 2014 announcement that it was divesting its global commercial semiconductor technology business, alleging violations of the Employee Retirement Income Security Act (ERISA). Management’s Retirement Plans Committee and three current or former IBM executives are named as defendants. On September 29, 2017, the Court granted the defendants’ motion to dismiss the first amended complaint. On December 10, 2018, the Second Circuit Court of Appeals reversed the District Court order. On January 14, 2020, the Supreme Court of the United States vacated the decision and remanded the case to the Second Circuit. On June 22, 2020, the Second Circuit reinstated its prior decision and remanded the case to the District Court. The company is party to, or otherwise involved in, proceedings brought by U.S. federal or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), known as “Superfund,” or laws similar to CERCLA. Such statutes require potentially responsible parties to participate in remediation activities regardless of fault or ownership of sites. The company is also conducting environmental investigations, assessments or remediations at or in the vicinity of several current or former operating sites globally pursuant to permits, administrative orders or agreements with country, state or local environmental agencies, and is involved in lawsuits and claims concerning certain current or former operating sites. The company is also subject to ongoing tax examinations and governmental assessments in various jurisdictions. Along with many other U.S. companies doing business in Brazil, the company is involved in various challenges with Brazilian tax authorities regarding non-income tax assessments and non-income tax litigation matters. The total potential amount related to all these matters for all applicable years is approximately $700 million. The company believes it will prevail on these matters and that this amount is not a meaningful indicator of liability.

Equity Activity

Equity Activity	6 Months Ended
Equity Activity	Jun. 30, 2020
Equity Activity
Equity Activity	14. Equity Activity: Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended June 30, 2020: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ 4 $ 135 $ 139 Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 1 $ 0 $ 1 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 1 $ 0 $ 1 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (36) $ 9 $ (26) Reclassification of (gains)/losses to: Cost of services 1 0 1 Cost of sales (9) 3 (7) Cost of financing 7 (2) 5 SG&A expense (7) 2 (5) Other (income) and expense (70) 18 (52) Interest expense 19 (5) 15 Total unrealized gains/(losses) on cash flow hedges $ (94) $ 25 $ (70) Retirement-related benefit plans (1): Prior service costs/(credits) $ — $ 0 $ 0 Net (losses)/gains arising during the period 57 (22) 35 Curtailments and settlements 13 (4) 9 Amortization of prior service (credits)/costs 0 1 1 Amortization of net (gains)/losses 566 (155) 411 Total retirement-related benefit plans $ 637 $ (180) $ 457 Other comprehensive income/(loss) $ 548 $ (21) $ 527 (1) These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended June 30, 2019: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ 5 $ 37 $ 42 Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ (2) $ 0 $ (1) Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ (2) $ 0 $ (1) Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (6) $ 2 $ (4) Reclassification of (gains)/losses to: Cost of services (20) 5 (15) Cost of sales (11) 3 (8) Cost of financing 25 (6) 18 SG&A expense (12) 3 (9) Other (income) and expense (202) 51 (151) Interest expense 52 (13) 39 Total unrealized gains/(losses) on cash flow hedges $ (175) $ 45 $ (129) Retirement-related benefit plans (1): Net (losses)/gains arising during the period $ 116 $ (25) $ 92 Curtailments and settlements 3 0 3 Amortization of prior service (credits)/costs (3) 0 (3) Amortization of net (gains)/losses 460 (123) 337 Total retirement-related benefit plans $ 576 $ (147) $ 430 Other comprehensive income/(loss) $ 405 $ (64) $ 340 (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the six months ended June 30, 2020: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ (915) $ 13 $ (902) Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 1 $ 0 $ 1 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 1 $ 0 $ 1 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (216) $ 55 $ (162) Reclassification of (gains)/losses to: Cost of services (9) 2 (6) Cost of sales (18) 5 (13) Cost of financing 15 (4) 11 SG&A expense (17) 4 (13) Other (income) and expense 19 (5) 15 Interest expense 41 (10) 31 Total unrealized gains/(losses) on cash flow hedges $ (184) $ 47 $ (137) Retirement-related benefit plans (1): Prior service costs/(credits) $ (4) $ 1 $ (3) Net (losses)/gains arising during the period 65 (24) 41 Curtailments and settlements 21 (6) 15 Amortization of prior service (credits)/costs 1 1 2 Amortization of net (gains)/losses 1,136 (312) 824 Total retirement-related benefit plans $ 1,219 $ (341) $ 879 Other comprehensive income/(loss) $ 121 $ (281) $ (160) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the six months ended June 30, 2019: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ 176 $ 38 $ 214 Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ (3) $ 1 $ (2) Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ (3) $ 1 $ (2) Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (359) $ 87 $ (272) Reclassification of (gains)/losses to: Cost of services (29) 8 (22) Cost of sales (30) 8 (21) Cost of financing 53 (13) 40 SG&A expense (34) 9 (25) Other (income) and expense (115) 29 (86) Interest expense 86 (22) 64 Total unrealized gains/(losses) on cash flow hedges $ (429) $ 106 $ (323) Retirement-related benefit plans (1): Net (losses)/gains arising during the period $ 113 $ (24) $ 89 Curtailments and settlements 4 0 4 Amortization of prior service (credits)/costs (6) 1 (5) Amortization of net (gains)/losses 924 (252) 671 Total retirement-related benefit plans $ 1,035 $ (275) $ 760 Other comprehensive income/(loss) $ 779 $ (131) $ 649 (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Accumulated Other Comprehensive Income/(Loss) (net of tax) Net Change Net Unrealized Net Unrealized Foreign Retirement- Gains/(Losses) Accumulated Gains/(Losses) Currency Related on Available- Other on Cash Flow Translation Benefit For-Sale Comprehensive (Dollars in millions) Hedges Adjustments* Plans Securities Income/(Loss) January 1, 2020 $ (179) $ (3,700) $ (24,718) $ 0 $ (28,597) Other comprehensive income before reclassifications (162) (902) 38 1 (1,025) Amount reclassified from accumulated other comprehensive income 25 — 841 — 866 Total change for the period $ (137) $ (902) $ 879 $ 1 $ (160) June 30, 2020 $ (316) $ (4,602) $ (23,839) $ 1 $ (28,757) * Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. Net Change Net Unrealized Net Unrealized Foreign Retirement- Gains/(Losses) Accumulated Gains/(Losses) Currency Related on Available- Other on Cash Flow Translation Benefit For-Sale Comprehensive (Dollars in millions) Hedges Adjustments* Plans Securities Income/(Loss) January 1, 2019 $ 284 $ (3,690) $ (26,083) $ 0 $ (29,490) Other comprehensive income before reclassifications (272) 214 89 (2) 29 Amount reclassified from accumulated other comprehensive income (51) — 671 — 620 Total change for the period $ (323) $ 214 $ 760 $ (2) $ 649 June 30, 2019 $ (39) $ (3,477) $ (25,323) $ (2) $ (28,841) *

Derivative Financial Instrument

Derivative Financial Instruments	6 Months Ended
Derivative Financial Instruments	Jun. 30, 2020
Derivative Financial Instruments
Derivative Financial Instruments	15. Derivative Financial Instruments: The company operates in multiple functional currencies and is a significant lender and borrower in the global markets. In the normal course of business, the company is exposed to the impact of interest rate changes and foreign currency fluctuations, and to a lesser extent equity and commodity price changes and client credit risk. The company limits these risks by following established risk management policies and procedures, including the use of derivatives, and, where cost effective, financing with debt in the currencies in which assets are denominated. For interest rate exposures, derivatives are used to better align rate movements between the interest rates associated with the company’s lease and other financial assets and the interest rates associated with its financing debt. Derivatives are also used to manage the related cost of debt. For foreign currency exposures, derivatives are used to better manage the cash flow volatility arising from foreign exchange rate fluctuations. In the Consolidated Balance Sheet, the company does not offset derivative assets against liabilities in master netting arrangements nor does it offset receivables or payables recognized upon payment or receipt of cash collateral against the fair values of the related derivative instruments. The amount recognized in accounts payable for the obligation to return cash collateral at June 30, 2020 was $2 million and no amount was recognized at December 31, 2019. No amount was recognized in other accounts receivable for the right to reclaim cash collateral at June 30, 2020 and $26 million was recognized at December 31, 2019. The company restricts the use of cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. No amount was rehypothecated at June 30, 2020 and December 31, 2019. Additionally, if derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet at June 30, 2020 December 31, 2019 In its hedging programs, the company may use forward contracts, futures contracts, interest-rate swaps, cross-currency swaps, equity swaps, and options depending upon the underlying exposure. The company is not a party to leveraged derivative instruments. A brief description of the major hedging programs, categorized by underlying risk, follows. Interest Rate Risk Fixed and Variable Rate Borrowings The company issues debt in the global capital markets to fund its operations and financing business. Access to cost-effective financing can result in interest rate mismatches with the underlying assets. To manage these mismatches and to reduce overall interest cost, the company may use interest-rate swaps to convert specific fixed-rate debt issuances into variable-rate debt (i.e., fair value hedges) and to convert specific variable-rate debt issuances into fixed-rate debt (i.e., cash flow hedges). At June 30, 2020 and December 31, 2019, the total notional amount of the company’s interest-rate swaps was $3.0 billion at both periods. The weighted-average remaining maturity of these instruments at June 30, 2020 and December 31, 2019 was approximately 1.7 years and 2.2 years, respectively. These interest-rate contracts were accounted for as fair value hedges. The company did not have any cash flow hedges relating to this program outstanding at June 30, 2020 and December 31, 2019. Forecasted Debt Issuance The company is exposed to interest rate volatility on future debt issuances. To manage this risk, the company may use instruments such as forward starting interest-rate swaps to lock in the rate on the interest payments related to the forecasted debt issuances. In the second quarter of 2019, the company issued an aggregate of $20 billion of indebtedness (refer to note 11, “Borrowings,” for additional information). Following the receipt of the net proceeds from this debt offering, the company terminated $5.5 billion of forward starting interest-rate swaps. There were no instruments outstanding at June 30, 2020 and December 31, 2019. In connection with cash flow hedges of forecasted interest payments related to the company's borrowings, the company recorded net losses of $183 million and net losses of $192 million (before taxes) at June 30, 2020 and December 31, 2019, respectively, in AOCI. The company estimates that $18 million (before taxes) of the deferred net losses on derivatives in AOCI at June 30, 2020 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying interest payments. Foreign Exchange Risk Long-Term Investments in Foreign Subsidiaries (Net Investment) A large portion of the company’s foreign currency denominated debt portfolio is designated as a hedge of net investment in foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates in the functional currency of major foreign subsidiaries with respect to the U.S. dollar. At June 30, 2020 and December 31, 2019, the carrying value of debt designated as hedging instruments was $17.1 billion and $7.3 billion, respectively. The $9.8 billion increase is part of the company’s risk management strategy and is primarily for the designation of new issuances and previously hedged Euro denominated debt. The company also uses cross-currency swaps and foreign exchange forward contracts for risk management purposes. At June 30, 2020 and December 31, 2019, the total notional amount of derivative instruments designated as net investment hedges was $8.8 billion and $7.9 billion, respectively. At June 30, 2020 and December 31, 2019, the weighted-average remaining maturity of these instruments was approximately 0.3 years and 0.1 years, respectively. Anticipated Royalties and Cost Transactions The company’s operations generate significant nonfunctional currency, third-party vendor payments and intercompany payments for royalties and goods and services among the company’s non-U.S. subsidiaries and with the company. In anticipation of these foreign currency cash flows and in view of the volatility of the currency markets, the company selectively employs foreign exchange forward contracts to manage its currency risk. These forward contracts are accounted for as cash flow hedges. The maximum remaining length of time over which the company hedged its exposure is approximately four years. At June 30, 2020 and December 31, 2019, the total notional amount of forward contracts designated as cash flow hedges of forecasted royalty and cost transactions was $9.4 billion and $9.7 billion, respectively. At June 30, 2020 and December 31, 2019, the weighted-average remaining maturity of these instruments was approximately 0.7 years and 0.8 years, respectively. At June 30, 2020 and December 31, 2019, in connection with cash flow hedges of anticipated royalties and cost transactions, the company recorded net gains of $58 million and net gains of $145 million (before taxes), respectively, in AOCI. The company estimates that $28 million (before taxes) of deferred net gains on derivatives in AOCI at June 30, 2020 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions. Foreign Currency Denominated Borrowings The company is exposed to exchange rate volatility on foreign currency denominated debt. To manage this risk, the company employs cross-currency swaps to convert fixed-rate foreign currency denominated debt to fixed-rate debt denominated in the functional currency of the borrowing entity. These swaps are accounted for as cash flow hedges. At June 30, 2020, the maximum length of time remaining over which the company hedged its exposure was approximately eight years. At June 30, 2020 and December 31, 2019, the total notional amount of cross-currency swaps designated as cash flow hedges of foreign currency denominated debt was $2.4 billion and $8.2 billion, respectively. The $5.7 billion decrease in cross-currency swaps is part of the company’s risk management strategy and the previously hedged foreign currency denominated debt has been designated as a hedge of net investment in foreign subsidiaries. At June 30, 2020 and December 31, 2019, in connection with cash flow hedges of foreign currency denominated borrowings, the company recorded net losses of $291 million and net losses of $185 million (before taxes), respectively, in AOCI. The company estimates that $25 million (before taxes) of deferred net losses on derivatives in AOCI at June 30, 2020 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying exposure. Subsidiary Cash and Foreign Currency Asset/Liability Management The company uses its Global Treasury Centers to manage the cash of its subsidiaries. These centers principally use currency swaps to convert cash flows in a cost-effective manner. In addition, the company uses foreign exchange forward contracts to economically hedge, on a net basis, the foreign currency exposure of a portion of the company’s nonfunctional currency assets and liabilities. The terms of these forward and swap contracts are generally less than one year. The changes in the fair values of these contracts and of the underlying hedged exposures are generally offsetting and are recorded in other (income) and expense in the Consolidated Income Statement. At June 30, 2020 and December 31, 2019, the total notional amount of derivative instruments in economic hedges of foreign currency exposure was $4.3 billion and $7.1 billion, respectively. Equity Risk Management The company is exposed to market price changes in certain broad market indices and in the company’s own stock primarily related to certain obligations to employees. Changes in the overall value of these employee compensation obligations are recorded in SG&A expense in the Consolidated Income Statement. Although not designated as accounting hedges, the company utilizes derivatives, including equity swaps and futures, to economically hedge the exposures related to its employee compensation obligations. The derivatives are linked to the total return on certain broad market indices or the total return on the company’s common stock, and are recorded at fair value with gains or losses also reported in SG&A expense in the Consolidated Income Statement. At June 30, 2020 and December 31, 2019, the total notional amount of derivative instruments in economic hedges of these compensation obligations was $1.2 billion and $1.3 billion, respectively. Cumulative Basis Adjustments for Fair Value Hedges At June 30, 2020 and December 31, 2019, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: June 30, December 31, (Dollars in millions) 2020 2019 Short-term debt: Carrying amount of the hedged item $ (1,313) $ — Cumulative hedging adjustments included in the carrying amount - assets/(liabilities) (14) — Long-term debt: Carrying amount of the hedged item $ (2,138) $ (3,411) Cumulative hedging adjustments included in the carrying amount - assets/(liabilities) (466) (1) (440) (1) (1) Includes ($378) million and ($404) million of hedging adjustments on discontinued hedging relationships at June 30, 2020 and December 31, 2019, respectively. The Effect of Derivative Instruments in the Consolidated Income Statement The total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value hedges, cash flow hedges, net investment hedges and derivatives not designated as hedging instruments are recorded and the total effect of hedge activity on these income and expense line items are as follows: Gains/(Losses) of (Dollars in millions) Total Total Hedge Activity For the three months ended June 30: 2020 2019 2020 2019 Cost of services $ 7,520 $ 8,181 * $ (1) $ 20 Cost of sales 1,739 1,741 * 9 11 Cost of financing 165 228 2 (18) SG&A expense 5,248 5,456 157 38 Other (income) and expense 179 (747) 92 271 Interest expense 323 348 7 (39) * Reclassified to conform to current period presentation. Gain (Loss) Recognized in Consolidated Income Statement Consolidated Recognized on Attributable to Risk (Dollars in millions) Income Statement Derivatives Being Hedged (2) For the three months ended June 30: Line Item 2020 2019 2020 2019 Derivative instruments in fair value hedges (1): Interest rate contracts Cost of financing $ 3 $ 23 $ 3 $ (20) Interest expense 8 48 8 (43) Derivative instruments not designated as hedging instruments: Foreign exchange contracts Other (income) and expense 22 69 N/A N/A Equity contracts SG&A expense 150 26 N/A N/A Total $ 183 $ 165 $ 11 $ (64) Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income (Dollars in millions) Consolidated Reclassified Amounts Excluded from For the three months Recognized in OCI Income Statement from AOCI Effectiveness Testing (3) ended June 30: 2020 2019 Line Item 2020 2019 2020 2019 Derivative instruments in cash flow hedges: Interest rate contracts $ — $ 3 Cost of financing $ (1) $ (1) $ — $ — Interest expense (3) (2) — — Foreign exchange contracts (36) (10) Cost of services (1) 20 — — Cost of sales 9 11 — — Cost of financing (6) (24) — — SG&A expense 7 12 — — Other (income) and expense 70 202 — — Interest expense (16) (51) — — Instruments in net investment hedges (4): Foreign exchange contracts (535) (148) Cost of financing — — 4 4 Interest expense — — 10 9 Total $ (571) $ (154) $ 59 $ 168 $ 14 $ 13 (1) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts. (2) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period. (3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period. (4) Instruments in net investment hedges include derivative and non-derivative instruments. N/A - not applicable Gains/(Losses) of (Dollars in millions) Total Total Hedge Activity For the six months ended June 30: 2020 2019 2020 2019 Cost of services $ 15,363 $ 16,453 * $ 9 $ 29 Cost of sales 3,363 3,344 * 18 30 Cost of financing 345 492 6 (36) SG&A expense 11,203 10,147 (34) 179 Other (income) and expense 361 (820) (9) 202 Interest expense 649 558 16 (59) * Reclassified to conform to current period presentation. Gain (Loss) Recognized in Consolidated Income Statement Consolidated Recognized on Attributable to Risk (Dollars in millions) Income Statement Derivatives Being Hedged (2) For the six months ended June 30: Line Item 2020 2019 2020 2019 Derivative instruments in fair value hedges (1): Interest rate contracts Cost of financing $ 21 $ 55 $ (11) $ (50) Interest expense 56 90 (29) (82) Derivative instruments not designated as hedging instruments: Foreign exchange contracts Other (income) and expense 10 87 N/A N/A Equity contracts SG&A expense (51) 145 N/A N/A Total $ 37 $ 377 $ (39) $ (132) Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income (Dollars in millions) Consolidated Reclassified Amounts Excluded from For the six months Recognized in OCI Income Statement from AOCI Effectiveness Testing (3) ended June 30: 2020 2019 Line Item 2020 2019 2020 2019 Derivative instruments in cash flow hedges: Interest rate contracts $ — $ (168) Cost of financing $ (2) $ (1) $ — $ — Interest expense (6) (1) — — Foreign exchange contracts (216) (191) Cost of services 9 29 — — Cost of sales 18 30 — — Cost of financing (13) (52) — — SG&A expense 17 34 — — Other (income) and expense (19) 115 — — Interest expense (35) (85) — — Instruments in net investment hedges (4): Foreign exchange contracts (50) (128) Cost of financing — — 11 12 Interest expense — — 30 19 Total $ (266) $ (487) $ (32) $ 70 $ 41 $ 30 (1) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts. (2) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period. (3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period. (4) Instruments in net investment hedges include derivative and non-derivative instruments. N/A - not applicable For the three and six months ended June 30, 2020 and 2019, there were no material gains or losses excluded from the assessment of hedge effectiveness (for fair value or cash flow hedges), or associated with an underlying exposure that did not or was not expected to occur (for cash flow hedges); nor are there any anticipated in the normal course of business.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
Stock-Based Compensation	Jun. 30, 2020
Stock-Based Compensation
Stock-Based Compensation	16. Stock-Based Compensation: Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. The following table presents total stock-based compensation cost included in income from continuing operations. Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Cost $ 40 $ 22 $ 67 $ 42 Selling, general and administrative 155 93 272 167 Research, development and engineering 52 21 97 39 Pre-tax stock-based compensation cost $ 247 $ 135 $ 436 $ 248 Income tax benefits (52) (29) (96) (54) Total net stock-based compensation cost $ 196 $ 106 $ 340 $ 194 Pre-tax stock-based compensation cost for the three months ended June 30, 2020 increased $112 million compared to the corresponding period in the prior year. This was primarily due to increases related to the conversion of stock-based compensation previously issued by Red Hat ($62 million), restricted stock units ($45 million) and performance share units ($5 million). Pre-tax stock-based compensation cost for the six months ended June 30, 2020 increased $188 million compared to the corresponding period in the prior year. This was primarily due to increases related to the conversion of stock-based compensation previously issued by Red Hat ($127 million) and restricted stock units ($63 million), partially offset by decreases in performance share units ($2 million). Total unrecognized compensation cost related to non-vested awards at June 30, 2020 was $1.6 billion and is expected to be recognized over a weighted-average period of approximately 2.6 years. Capitalized stock-based compensation cost was not material at June 30, 2020 and 2019.

Retirement-Related Benefits

Retirement-Related Benefits	6 Months Ended
Retirement-Related Benefits	Jun. 30, 2020
Retirement-Related Benefits
Retirement-Related Benefits	17. Retirement-Related Benefits: The company offers defined benefit pension plans, defined contribution pension plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits. The following tables provide the pre-tax cost for all retirement-related plans. Yr. to Yr. (Dollars in millions) Percent For the three months ended June 30: 2020 2019 Change Retirement-related plans — cost Defined benefit and contribution pension plans — cost $ 596 $ 441 34.9 % Nonpension postretirement plans — cost 50 53 (5.6) Total $ 645 $ 494 30.6 % Yr. to Yr. (Dollars in millions) Percent For the six months ended June 30: 2020 2019 Change Retirement-related plans — cost Defined benefit and contribution pension plans — cost $ 1,179 $ 878 34.3 % Nonpension postretirement plans — cost 102 107 (4.8) Total $ 1,281 $ 985 30.0 % The following tables provide the components of the cost/(income) for the company’s pension plans. Cost/(Income) of Pension Plans (Dollars in millions) U.S. Plans Non-U.S. Plans For the three months ended June 30: 2020 2019 2020 2019 Service cost $ — $ — $ 95 $ 93 Interest cost (1) 375 469 137 206 Expected return on plan assets (1) (542) (650) (311) (396) Amortization of prior service costs/(credits) (1) 4 4 (5) (7) Recognized actuarial losses (1) 207 139 340 312 Curtailments and settlements (1) — — 13 3 Multi-employer plans — — 7 8 Other costs/(credits) (1) — — 9 6 Total net periodic pension (income)/cost of defined benefit plans $ 44 $ (37) $ 284 $ 225 Cost of defined contribution plans 154 140 113 114 Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement $ 198 $ 103 $ 397 $ 339 (Dollars in millions) U.S. Plans Non-U.S. Plans For the six months ended June 30: 2020 2019 2020 2019 Service cost $ — $ — $ 190 $ 185 Interest cost (1) 750 941 266 413 Expected return on plan assets (1) (1,084) (1,300) (620) (795) Amortization of prior service costs/(credits) (1) 8 8 (9) (13) Recognized actuarial losses (1) 415 279 682 626 Curtailments and settlements (1) — — 21 4 Multi-employer plans — — 14 17 Other costs/(credits) (1) — — 14 11 Total net periodic pension (income)/cost of defined benefit plans $ 89 $ (71) $ 559 $ 449 Cost of defined contribution plans 309 289 223 212 Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement $ 398 $ 218 $ 782 $ 661 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. The following tables provide the components of the cost for the company’s nonpension postretirement plans. Cost of Nonpension Postretirement Plans (Dollars in millions) U.S. Plan Non-U.S. Plans For the three months ended June 30: 2020 2019 2020 2019 Service cost $ 2 $ 3 $ 1 $ 1 Interest cost (1) 26 36 8 12 Expected return on plan assets (1) — — (1) (1) Amortization of prior service costs/(credits) (1) 1 (1) 0 0 Recognized actuarial losses (1) 7 0 5 3 Curtailments and settlements (1) — — — — Total nonpension postretirement plans cost recognized in Consolidated Income Statement $ 36 $ 38 $ 14 $ 15 (Dollars in millions) U.S. Plan Non-U.S. Plans For the six months ended June 30: 2020 2019 2020 2019 Service cost $ 4 $ 5 $ 3 $ 3 Interest cost (1) 51 73 18 25 Expected return on plan assets (1) — — (2) (3) Amortization of prior service costs/(credits) (1) 2 (1) 0 0 Recognized actuarial losses (1) 15 0 11 5 Curtailments and settlements (1) — — 0 0 Total nonpension postretirement plans cost recognized in Consolidated Income Statement $ 72 $ 77 $ 29 $ 30 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. The company does not anticipate any significant changes to the expected plan contributions in 2020 from the amounts disclosed in the 2019 Annual Report. The table below includes contributions to the following plans: - Plan Contributions Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 U.S. nonpension postretirement benefit plan $ 65 $ 33 $ 200 $ 227 Non-U.S. DB and multi-employer plans 29 34 111 128 Total plan contributions $ 94 $ 66 $ 311 $ 355 During the three months ended June 30, 2020 and 2019, $155 million and $101 million, respectively, was contributed in U.S. Treasury securities (includes the Active Medical Trust). During the six months ended June 30, 2020 and 2019, $410 million and $357 million, respectively, was contributed in U.S. Treasury securities (includes the Active Medical Trust). The contribution of U.S. Treasury securities is considered a non-cash transaction.

Subsequent Events

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2020
Subsequent Events
Subsequent Events	18. Subsequent Events On July 28, 2020, the company announced that the Board of Directors approved a quarterly dividend of $1.63 per common share. The dividend is payable September 10, 2020 to shareholders of record on August 10, 2020.

Accounting Policies (Policies)

Accounting Policies (Policies)	6 Months Ended
Accounting Policies (Policies)	Jun. 30, 2020
Accounting Policies
Basis of Presentation	The accompanying Consolidated Financial Statements and footnotes of the International Business Machines Corporation (IBM or the company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial statements and footnotes are unaudited. In the opinion of the company’s management, these statements include all adjustments, which are only of a normal recurring nature, necessary to present a fair statement of the company’s results of operations, financial position and cash flows. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. In the first quarter of 2020, the company realigned offerings and the related management system to reflect divestitures completed in the second half of 2019 and tighter integration of certain industry-related consulting services. These changes impacted a few of the company’s reportable segments, but did not impact the Consolidated Financial Statements. Refer to note 4, “Segments,” for additional information on the company’s reportable segments. The periods presented in this Form 10-Q are reported on a comparable basis. On April 6, 2020, Arvind Krishna became Chief Executive Officer of IBM and announced a number of management changes which did not impact the company’s reportable segments. For the three months ended June 30, 2020, the company reported a provision for income taxes of $209 million. For the six months ended June 30, 2020, the company reported a benefit from income taxes of $1,017 million. The tax benefit was primarily related to the tax impacts of an intra-entity sale of certain of the company’s intellectual property in the first quarter, which required the recognition of a $3,442 million deferred tax asset. The recognition of this deferred tax asset and the related impacts resulted in a net one-time benefit in the first quarter of $939 million. For the three and six months ended June 30, 2019, the company reported a provision for income taxes of $269 million and $558 million, respectively. On July 9, 2019, the company completed the acquisition of all of the outstanding shares of Red Hat, Inc. (Red Hat). Refer to note 5, “Acquisitions & Divestitures,” and note 10, “Intangible Assets Including Goodwill,” for additional information. Noncontrolling interest amounts of $6.8 million and $4.9 million, net of tax, for the three months ended June 30, 2020 and 2019, respectively, and $11.3 million and $11.9 million, net of tax, for the six months ended June 30, 2020 and 2019, respectively, are included as a reduction within other (income) and expense in the Consolidated Income Statement. Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the company’s 2019 Annual Report. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, beginning in the third-quarter 2019, revenues and related costs for post-contract support provided for perpetual (one-time charge) software licenses have been reclassified from Services Revenue to Sales Revenue and Services Cost to Sales Cost within the Consolidated Income Statement. The revenue and cost amounts reclassified were $0.5 billion and $0.1 billion, respectively, for the three months June 30, 2019 six months June 30, 2019
Accounting Changes	New Standards to be Implemented Simplifying the Accounting for Income Taxes Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Standards Implemented Reference Rate Reform Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Simplifying the Test for Goodwill Impairment Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Financial Instruments–Credit Losses Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Leases Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters For all other standards that the company adopted in 2019, there was no material impact in the consolidated financial results.
Revenue Recognition For Remaining Performance Obligations	Remaining Performance Obligations The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-Service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.
Segments	During the first quarter of 2020, the company realigned offerings and the related management system to reflect divestitures completed in the second half of 2019 and tighter integration of certain industry-related consulting services. Accordingly, the company updated its Cloud & Cognitive Software segment, Global Business Services segment and the Other – divested businesses category in the first quarter of 2020 and recast the related historical information for consistency with the go-forward performance. Total recast revenue for full-year 2019 was approximately $0.3 billion of IBM’s total $77 billion. There was no change to the Global Technology Services, Systems or Global Financing segments, and there was no impact to IBM’s consolidated results.
Financial Assets and Liabilities Measured At Fair Value	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The company classifies certain assets and liabilities based on the following fair value hierarchy: ● Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date; ● Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and ● Level 3—Unobservable inputs for the asset or liability. When available, the company uses unadjusted quoted market prices in active markets to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation. The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument. In determining the fair value of financial instruments, the company considers certain market valuation adjustments to the “base valuations” calculated using the methodologies described below for several parameters that market participants would consider in determining fair value: ● Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument. ● Credit risk adjustments are applied to reflect the company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the company’s own credit risk as observed in the credit default swap market. The company holds investments primarily in time deposits, certificates of deposit, and U.S. government debt that are designated as available-for-sale. The primary objective of the company’s cash and debt investment portfolio is to maintain principal by investing in very liquid and highly rated investment grade securities. Available-for-sale securities are measured for impairment on a recurring basis by comparing the security’s fair value with its amortized cost basis. Effective January 1, 2020 with the adoption of the new standard on credit losses, if the fair value of the security falls below its amortized cost basis, the change in fair value is recognized in the period the impairment is identified when the loss is due to credit factors. The change in fair value due to non-credit factors is recorded in other comprehensive income when the company does not intend to sell and has the ability to hold the investment. The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. There were no impairments for credit losses or non-credit impairments for the three and six months ended June 30, 2020. Prior to the adoption of the new standard, available-for-sale securities were measured for impairment using an other-than-temporary impairment model. No impairment was recorded for the three and six months ended June 30, 2019. Certain nonfinancial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for nonfinancial assets depend on the type of asset. There were no material impairments of nonfinancial assets for the six months ended June 30, 2020 and 2019, respectively.
Financial Assets and Liabilities Not Measured At Fair Value	Financial Assets and Liabilities Not Measured at Fair Value Short-Term Receivables and Payables Notes and other accounts receivable and other investments are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt (excluding the current portion of long-term debt and including short-term finance lease liabilities) are financial liabilities with carrying values that approximate fair value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt which would be classified as Level 2. Loans and Long-Term Receivables Fair values are based on discounted future cash flows using current interest rates offered for similar loans to clients with similar credit ratings for the same remaining maturities. At June 30, 2020 and December 31, 2019, the difference between the carrying amount and estimated fair value for loans and long-term receivables was immaterial. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy. Long-Term Debt Fair value of publicly-traded long-term debt is based on quoted market prices for the identical liability when traded as an asset in an active market. For other long-term debt (including long-term finance lease liabilities) for which a quoted market price is not available, an expected present value technique that uses rates currently available to the company for debt with similar terms and remaining maturities is used to estimate fair value. The carrying amount of long-term debt was $55,449 million and $54,102 million, and the estimated fair value was $61,600 million and $58,431 million at June 30, 2020 and December 31, 2019, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy.
Financing Receivables	Effective January 1, 2020, the company adopted the new accounting standard related to credit losses, using the transition methodology whereby prior comparative periods were not retrospectively presented in the Consolidated Financial Statements. Refer to note 2, “Accounting Changes,” for additional information. Under this new guidance, the amortized cost basis of a financial asset represents the original amount of the financing receivable (including residual value) adjusted for unearned income, deferred initial direct costs, cash collected, write-offs and any foreign exchange adjustments. The allowance for credit losses represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. Prior to the effective date, financing receivables were measured at recorded investment, which does not include residual value. As a result, all prior periods are presented at recorded investment, while current period information is presented at amortized cost. Additionally, current period information reflects updates to the portfolio segments, and other presentation changes within the following tables, as a result of the adoption of this new guidance.
Allowance for Credit Losses - Financing Receivables	Allowance for Credit Losses – Financing Receivables Refer to note A, “Significant Accounting Policies,” in the company’s 2019 Annual Report for a full description of its accounting policies for trade and financing receivables, contract assets and related allowances. The descriptions below include any changes to those policies due to the new standard. Effective with the adoption of the new credit losses standard, the company’s estimates of its allowances for expected credit losses include consideration of: past events, including any historical default, historical concessions and resulting troubled debt restructurings, current economic conditions, taking into account any non-freestanding mitigating credit enhancements and certain forward-looking information, including reasonable and supportable forecasts.
Collectively Evaluated Financing Receivables	Collectively Evaluated Financing Receivables The company determines its allowance for credit losses based on two portfolio segments: client financing receivables and commercial financing receivables, and further segments the portfolio into three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. For client financing receivables, the company uses a credit loss model to calculate allowances based on its internal loss experience and current conditions and forecasts, by class of financing receivable. The company records an unallocated reserve that is calculated by applying a reserve rate to its portfolio, excluding accounts that have been individually evaluated and specifically reserved. This reserve rate is based upon credit rating, probability of default, term and loss history. The allowance is adjusted quarterly for expected recoveries of amounts that were previously written off or are expected to be written off. Recoveries cannot exceed the aggregated amount of the previous write-off or expected write-off. Macroeconomic variables attributed to the expected credit losses for client financing receivables may vary by class of financing receivables based on historical experiences, portfolio composition and current environment. In addition to a qualitative review of credit risk factors across the portfolio, the company considers forward-looking macroeconomic variables such as gross domestic product, unemployment rates, equity prices and corporate profits when quantifying the impact of economic forecasts on its client financing receivables allowance for expected credit losses. The company also considers the impact of current conditions and economic forecasts relating to specific industries, geographical areas, and client-specific exposures on the portfolio. Under this approach, forecasts of these variables over two years are considered reasonable and supportable. Beyond two years, the company reverts to long-term average loss experience. Forward-looking estimates require the use of judgment, particularly in times of economic uncertainty. Consistent with the first quarter of 2020, with evolving global impacts from the COVID-19 pandemic, external economic models have been revised with increased frequency and with alternative scenarios. The company’s allowances at June 30, 2020, reflect the qualitative process described above. Any changes to economic models that occurred after the balance sheet date will be reflected in future periods. The allowance for commercial financing receivables is estimated based on a combination of write-off history and current economic conditions, excluding any individually evaluated accounts. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material. At January 1, 2020, upon adoption of the new standard, the company recorded an additional allowance for client and commercial financing receivables (including related off-balance sheet commitments) of $64 million. This was primarily driven by an increase in the client financing receivables allowance. Refer to note 12, “Commitments,” for additional information regarding off-balance sheet commitments.
Past Due Financing Receivables	Past Due Financing Receivables
Commitments	Effective January 1, 2020, the company adopted the new standard on credit losses, which resulted in the recognition of a related allowance for non-cancellable off-balance sheet commitments. Refer to note 2, “Accounting Changes,” for additional information. The allowance for these commitments is recorded in other liabilities in the Consolidated Balance Sheet and was not material at June 30, 2020. The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note 8, “Financing Receivables,” for additional information.The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote.
Contingencies	The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the quarter ended June 30, 2020 were not material to the Consolidated Financial Statements. In accordance with the relevant accounting guidance, the company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the company also discloses matters based on its consideration of other matters and qualitative factors, including the experience of other companies in the industry, and investor, customer and employee relations considerations. With respect to certain of the claims, suits, investigations and proceedings discussed herein, the company believes at this time that the likelihood of any material loss is remote, given, for example, the procedural status, court rulings, and/or the strength of the company’s defenses in those matters. With respect to the remaining claims, suits, investigations and proceedings discussed in this note, except as specifically discussed herein, the company is unable to provide estimates of reasonably possible losses or range of losses, including losses in excess of amounts accrued, if any, for the following reasons. Claims, suits, investigations and proceedings are inherently uncertain, and it is not possible to predict the ultimate outcome of these matters. It is the company’s experience that damage amounts claimed in litigation against it are unreliable and unrelated to possible outcomes, and as such are not meaningful indicators of the company’s potential liability. Further, the company is unable to provide such an estimate due to a number of other factors with respect to these claims, suits, investigations and proceedings, including considerations of the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate), to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter.
Derivative Financial Instruments	The company operates in multiple functional currencies and is a significant lender and borrower in the global markets. In the normal course of business, the company is exposed to the impact of interest rate changes and foreign currency fluctuations, and to a lesser extent equity and commodity price changes and client credit risk. The company limits these risks by following established risk management policies and procedures, including the use of derivatives, and, where cost effective, financing with debt in the currencies in which assets are denominated. For interest rate exposures, derivatives are used to better align rate movements between the interest rates associated with the company’s lease and other financial assets and the interest rates associated with its financing debt. Derivatives are also used to manage the related cost of debt. For foreign currency exposures, derivatives are used to better manage the cash flow volatility arising from foreign exchange rate fluctuations. In the Consolidated Balance Sheet, the company does not offset derivative assets against liabilities in master netting arrangements nor does it offset receivables or payables recognized upon payment or receipt of cash collateral against the fair values of the related derivative instruments. The amount recognized in accounts payable for the obligation to return cash collateral at June 30, 2020 was $2 million and no amount was recognized at December 31, 2019. No amount was recognized in other accounts receivable for the right to reclaim cash collateral at June 30, 2020 and $26 million was recognized at December 31, 2019. The company restricts the use of cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. No amount was rehypothecated at June 30, 2020 and December 31, 2019. Additionally, if derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet at June 30, 2020 December 31, 2019 In its hedging programs, the company may use forward contracts, futures contracts, interest-rate swaps, cross-currency swaps, equity swaps, and options depending upon the underlying exposure. The company is not a party to leveraged derivative instruments.
Derivatives, Methods of Accounting, Hedge Effectiveness	(3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period.
Stock-Based Compensation	Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
Revenue Recognition (Tables)	Jun. 30, 2020
Revenue Recognition
Schedule of disaggregation of revenue	Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Cloud & Data Platforms $ 2,797 $ 2,173 $ 5,333 $ 4,090 Cognitive Applications 1,246 1,372 * 2,428 2,609 * Transaction Processing Platforms 1,706 2,018 3,226 3,830 Total Cloud & Cognitive Software $ 5,748 $ 5,563 * $ 10,987 $ 10,530 * Consulting 1,936 2,020 * 4,007 4,021 * Application Management 1,734 1,919 3,573 3,827 Global Process Services 221 258 447 505 Total Global Business Services $ 3,890 $ 4,197 * $ 8,027 $ 8,353 * Infrastructure & Cloud Services 4,813 5,174 9,729 10,383 Technology Support Services 1,503 1,663 3,054 3,328 Total Global Technology Services $ 6,316 $ 6,837 $ 12,783 $ 13,711 Systems Hardware 1,488 1,328 2,484 2,241 Operating Systems Software 365 425 736 840 Total Systems $ 1,852 $ 1,753 $ 3,220 $ 3,081 Global Financing** 265 351 564 757 Other 50 460 * 113 911 * Total revenue $ 18,123 $ 19,161 $ 35,694 $ 37,342 * Recast to conform to current period presentation. Refer to note 4, “Segments,” for additional information. ** Contains lease and loan/working capital financing arrangements which are not subject to the guidance on revenue from contracts with customers.
Schedule of disaggregation of revenue by geography	Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Americas $ 8,450 $ 8,806 $ 16,617 $ 17,299 Europe/Middle East/Africa 5,695 6,149 11,212 11,876 Asia Pacific 3,977 4,205 7,865 8,167 Total $ 18,123 $ 19,161 $ 35,694 $ 37,342
Schedule of reconciliation of contract balances	At June 30, At December 31, (Dollars in millions) 2020 2019 Notes and accounts receivable — trade (net of allowances of $369 and $299 at June 30, 2020 and December 31, 2019, respectively) $ 6,543 $ 7,870 Contract assets (1) 505 492 Deferred income (current) 12,469 12,026 Deferred income (noncurrent) 3,787 3,851 (1) Included within prepaid expenses and other current assets in the Consolidated Balance Sheet.
Schedule of notes and accounts receivable - trade allowance for credit losses	(Dollars in millions) January 1, 2020* Additions / (Releases) Write-offs Other June 30, 2020 $ 316 $ 87 $ (26) $ (8) $ 369 January 1, 2019 Additions / (Releases) Write-offs Other December 31, 2019 $ 309 $ 98 $ (113) $ 5 $ 299 * Opening balance does not equal the allowance at December 31, 2019 due to the adoption of the guidance for current expected credit losses. Refer to note 2, “Accounting Changes,” for additional information . ** Primarily represents translation adjustments .

Segments (Tables)

Segments (Tables)	6 Months Ended
Segments (Tables)	Jun. 30, 2020
Segments
Revenue and Pre-tax Income by Segment	Cloud & Global Global Cognitive Business Technology Global Total (Dollars in millions) Software Services Services Systems Financing Segments For the three months ended June 30, 2020: External revenue $ 5,748 $ 3,890 $ 6,316 $ 1,852 $ 265 $ 18,072 Internal revenue 743 55 304 240 241 1,582 Total revenue $ 6,491 $ 3,945 $ 6,621 $ 2,092 $ 506 $ 19,655 Pre-tax income from continuing operations $ 1,708 $ 362 $ 250 $ 248 $ 176 $ 2,744 Revenue year-to-year change 5.2 % (7.5) % (7.3) % 8.7 % (20.0) % (2.4) % Pre-tax income year-to-year change (14.9) % 25.1 % 6.4 % 304.8 % (26.2) % (3.1) % Pre-tax income margin 26.3 % 9.2 % 3.8 % 11.8 % 34.9 % 14.0 % For the three months ended June 30, 2019: External revenue $ 5,563 * $ 4,197 * $ 6,837 $ 1,753 $ 351 $ 18,701 * Internal revenue 607 69 302 171 281 1,430 Total revenue $ 6,170 * $ 4,266 * $ 7,139 $ 1,924 $ 632 $ 20,131 * Pre-tax income from continuing operations $ 2,007 * $ 290 * $ 235 $ 61 $ 239 $ 2,832 * Pre-tax income margin 32.5 %* 6.8 %* 3.3 % 3.2 % 37.8 % 14.1 %* Cloud & Global Global Cognitive Business Technology Global Total (Dollars in millions) Software Services Services Systems Financing Segments For the six months ended June 30, 2020: External revenue $ 10,987 $ 8,027 $ 12,783 $ 3,220 $ 564 $ 35,581 Internal revenue 1,556 101 599 388 453 3,096 Total revenue $ 12,543 $ 8,128 $ 13,382 $ 3,608 $ 1,017 $ 38,677 Pre-tax income from continuing operations $ 2,641 $ 633 $ 72 $ 31 $ 370 $ 3,747 Revenue year-to-year change 4.7 % (4.3) % (6.4) % 5.7 % (24.0) % (2.2) % Pre-tax income year-to-year change (30.4) % 7.8 % (85.9) % nm (29.8) % (29.0) % Pre-tax income margin 21.1 % 7.8 % 0.5 % 0.9 % 36.4 % 9.7 % For the six months ended June 30, 2019: External revenue $ 10,530 * $ 8,353 * $ 13,711 $ 3,081 $ 757 $ 36,432 * Internal revenue 1,448 143 591 334 581 3,097 Total revenue $ 11,978 * $ 8,495 * $ 14,303 $ 3,415 $ 1,338 $ 39,529 * Pre-tax income/(loss) from continuing operations $ 3,792 * $ 587 * $ 510 $ (141) $ 527 $ 5,276 * Pre-tax income/(loss) margin 31.7 %* 6.9 %* 3.6 % (4.1) % 39.4 % 13.3 %*
Reconciliation of segment revenue and pre-tax income to IBM as reported	Reconciliations to IBM as Reported: (Dollars in millions) For the three months ended June 30: 2020 2019 Revenue: Total reportable segments $ 19,655 $ 20,131 * Other—divested businesses 13 403 * Other revenue 37 57 Eliminations of internal transactions (1,582) (1,430) Total consolidated revenue $ 18,123 $ 19,161 Pre-tax income from continuing operations: Total reportable segments $ 2,744 $ 2,832 * Amortization of acquired intangible assets (472) (169) Acquisition-related (charges)/income (1) (102) Non-operating retirement-related (costs)/income (273) (136) Eliminations of internal transactions (121) (60) Other—divested businesses (22) 561 * Unallocated corporate amounts (283) (156) Total pre-tax income from continuing operations $ 1,571 $ 2,768 * Recast to conform to current period presentation. Reconciliations to IBM as Reported: (Dollars in millions) For the six months ended June 30: 2020 2019 Revenue: Total reportable segments $ 38,677 $ 39,529 * Other—divested businesses 32 780 * Other revenue 81 131 Eliminations of internal transactions (3,096) (3,097) Total consolidated revenue $ 35,694 $ 37,342 Pre-tax income from continuing operations: Total reportable segments $ 3,747 $ 5,276 * Amortization of acquired intangible assets (945) (343) Acquisition-related (charges)/income (2) (141) Non-operating retirement-related (costs)/income (538) (274) Eliminations of internal transactions (176) (149) Other—divested businesses 3 505 * Unallocated corporate amounts (568) (224) Total pre-tax income from continuing operations $ 1,522 $ 4,651 * Recast to conform to current period presentation. nm - not meaningful

Acquisitions_Divestitures (Tabl

Acquisitions/Divestitures (Tables) - Red Hat, Inc.	6 Months Ended
Acquisitions/Divestitures (Tables) - Red Hat, Inc.	Jun. 30, 2020
Acquisitions/Divestitures
Business acquisition, purchase price allocation	Amortization Allocated (Dollars in millions) Life (in years) Amount Current assets* $ 3,186 Property, plant and equipment/noncurrent assets 948 Intangible assets: Goodwill N/A 22,986 Client relationships 10 7,215 Completed technology 9 4,571 Trademarks 20 1,686 Total assets acquired $ 40,592 Current liabilities** 1,395 Noncurrent liabilities 4,117 Total liabilities assumed $ 5,513 Total purchase price $ 35,080 * Includes $2.2 billion of cash and cash equivalents. ** Includes $485 million of short-term debt related to the convertible notes acquired from Red Hat that were recognized at their fair value on the acquisition date, which was fully settled as of October 1, 2019.
Business acquisition, goodwill segment allocation	(Dollars in billions) Goodwill Segment Allocated* Cloud & Cognitive Software $ 18.4 Global Technology Services 3.1 Global Business Services 1.1 Systems 0.4 Total $ 23.0 * It is expected that approximately six percent of the goodwill will be deductible for tax purposes.

Earnings Per Share of Common _2

Earnings Per Share of Common Stock (Tables)	6 Months Ended
Earnings Per Share of Common Stock (Tables)	Jun. 30, 2020
Earnings Per Share of Common Stock
Computation of basic and diluted earnings per share	For the Three Months Ended June 30, 2020 June 30, 2019 Number of shares on which basic earnings per share is calculated: Weighted-average shares outstanding during period 889,435,166 886,273,682 Add — Incremental shares under stock-based compensation plans 4,290,365 3,281,570 Add — Incremental shares associated with contingently issuable shares 1,213,549 1,276,549 Number of shares on which diluted earnings per share is calculated 894,939,080 890,831,801 Income from continuing operations (millions) $ 1,362 $ 2,499 Income/(loss) from discontinued operations, net of tax (millions) (1) (1) Net income on which basic earnings per share is calculated (millions) $ 1,361 $ 2,498 Income from continuing operations (millions) $ 1,362 $ 2,499 Net income applicable to contingently issuable shares (millions) — 0 Income from continuing operations on which diluted earnings per share is calculated (millions) $ 1,362 $ 2,500 Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated (millions) (1) (1) Net income on which diluted earnings per share is calculated (millions) $ 1,361 $ 2,499 Earnings/(loss) per share of common stock: Assuming dilution Continuing operations $ 1.52 $ 2.81 Discontinued operations 0.00 0.00 Total $ 1.52 $ 2.81 Basic Continuing operations $ 1.53 $ 2.82 Discontinued operations 0.00 0.00 Total $ 1.53 $ 2.82 For the Six Months Ended June 30, 2020 June 30, 2019 Number of shares on which basic earnings per share is calculated: Weighted-average shares outstanding during period 888,702,256 887,927,612 Add — Incremental shares under stock-based compensation plans 5,015,390 3,327,015 Add — Incremental shares associated with contingently issuable shares 1,271,513 1,116,537 Number of shares on which diluted earnings per share is calculated 894,989,159 892,371,164 Income from continuing operations (millions) $ 2,538 $ 4,093 Income/(loss) from discontinued operations, net of tax (millions) (2) (4) Net income on which basic earnings per share is calculated (millions) $ 2,536 $ 4,089 Income from continuing operations (millions) $ 2,538 $ 4,093 Net income applicable to contingently issuable shares (millions) (2) 0 Income from continuing operations on which diluted earnings per share is calculated (millions) $ 2,536 $ 4,093 Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated (millions) (2) (4) Net income on which diluted earnings per share is calculated (millions) $ 2,534 $ 4,090 Earnings/(loss) per share of common stock: Assuming dilution Continuing operations $ 2.83 $ 4.58 Discontinued operations 0.00 0.00 Total $ 2.83 $ 4.58 Basic Continuing operations $ 2.85 $ 4.61 Discontinued operations 0.00 0.00 Total $ 2.85 $ 4.61

Financial Assets & Liabilities

Financial Assets & Liabilities (Tables)	6 Months Ended
Financial Assets & Liabilities (Tables)	Jun. 30, 2020
Financial Assets & Liabilities
Financial assets and financial liabilities measured at fair value on a recurring basis	Fair Value Hierarchy At June 30, 2020 At December 31, 2019 (Dollars in millions) Level Assets (7) Liabilities (8) Assets (7) Liabilities (8) Cash equivalents (1) Time deposits and certificates of deposit (2) 2 $ 7,785 $ N/A $ 4,392 $ N/A Money market funds 1 926 N/A 427 N/A Total cash equivalents $ 8,712 $ N/A $ 4,819 $ N/A Equity investments (3) 1 0 N/A 0 N/A Debt securities-current (2)(4) 2 2,063 N/A 696 N/A Debt securities-noncurrent (2)(5) 2 22 N/A 65 N/A Derivatives designated as hedging instruments Interest rate contracts 2 126 — 56 — Foreign exchange contracts 2 161 468 175 635 Derivatives not designated as hedging instruments Foreign exchange contracts 2 8 18 10 33 Equity contracts (6) 1,2 11 4 1 4 Total $ 11,104 $ 491 $ 5,823 $ 673 (1) Included within cash and cash equivalents in the Consolidated Balance Sheet. (2) Available-for-sale securities with an amortized cost basis that approximates fair value. (3) Included within investments and sundry assets in the Consolidated Balance Sheet. (4) Primarily includes time deposits and U.S. treasury bills that are reported within marketable securities in the Consolidated Balance Sheet. (5) Primarily includes corporate debt securities with a maximum maturity of two years that are reported within investments and sundry assets in the Consolidated Balance Sheet. (6) Level 1 includes immaterial amounts related to equity futures contracts. (7) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Balance Sheet at June 30, 2020 were $195 million and $112 million, respectively, and at December 31, 2019 were $149 million and $94 million, respectively. (8) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Balance Sheet at June 30, 2020 were $289 million and $202 million, respectively, and at December 31, 2019 were $167 million and $506 million , respectively.

Financing Receivables (Tables)

Financing Receivables (Tables)	6 Months Ended
Financing Receivables (Tables)	Jun. 30, 2020
Financing Receivables
Summary of the components of financing receivables	Client Financing Receivables Client Loan and Investment in Installment Payment Sales-Type and Commercial (Dollars in millions) Receivables Direct Financing Financing At June 30, 2020: (Loans) Leases Receivables Total Financing receivables, gross $ 12,539 $ 4,967 $ 2,393 $ 19,898 Unearned income (506) (393) (3) (903) Residual value* — 586 — 586 Amortized cost $ 12,033 $ 5,160 $ 2,389 $ 19,582 Allowance for credit losses (164) (89) (11) (264) Total financing receivables, net $ 11,869 $ 5,070 $ 2,379 $ 19,318 Current portion $ 7,501 $ 2,087 $ 2,379 $ 11,967 Noncurrent portion $ 4,368 $ 2,983 $ — $ 7,351 * Includes guaranteed and unguaranteed residual value. Client Financing Receivables Client Loan and Investment in Installment Payment Sales-Type and Commercial (Dollars in millions) Receivables Direct Financing Financing At December 31, 2019: (Loans) Leases Receivables Total Financing receivables, gross $ 13,592 $ 6,077 $ 3,836 $ 23,504 Unearned income (570) (509) (4) (1,083) Recorded investment $ 13,022 $ 5,567 $ 3,831 $ 22,421 Allowance for credit losses (138) (72) (11) (221) Unguaranteed residual value — 652 — 652 Guaranteed residual value — 53 — 53 Total financing receivables, net $ 12,884 $ 6,199 $ 3,820 $ 22,904 Current portion $ 8,037 $ 2,334 $ 3,820 $ 14,192 Noncurrent portion $ 4,847 $ 3,865 $ — $ 8,712
Schedule of financing receivables and allowance for credit losses by class	(Dollars in millions) At June 30, 2020: Americas EMEA Asia Pacific Total Amortized cost $ 9,060 $ 4,932 $ 3,201 $ 17,192 Allowance for credit losses Beginning balance at December 31, 2019 $ 120 $ 54 $ 36 $ 210 Adjustment for adoption of new standard 21 15 5 41 Beginning balance at January 1, 2020 $ 142 $ 69 $ 41 $ 252 Write-offs $ (17) $ (1) $ (2) $ (21) Recoveries 0 0 2 2 Additions/(releases) 28 9 (2) 34 Other* (13) 0 (1) (14) Ending balance at June 30, 2020 $ 140 $ 76 $ 37 $ 253 * Primarily represents translation adjustments. (Dollars in millions) At December 31, 2019: Americas EMEA Asia Pacific Total Recorded investment Lease receivables $ 3,419 $ 1,186 $ 963 $ 5,567 Loan receivables 6,726 3,901 2,395 13,022 Ending balance $ 10,144 $ 5,087 $ 3,359 $ 18,590 Recorded investment collectively evaluated for impairment $ 10,032 $ 5,040 $ 3,326 $ 18,399 Recorded investment individually evaluated for impairment $ 112 $ 47 $ 32 $ 191 Allowance for credit losses Beginning balance at January 1, 2019 Lease receivables $ 53 $ 22 $ 24 $ 99 Loan receivables 105 43 32 179 Total $ 158 $ 65 $ 56 $ 279 Write-offs $ (42) $ (3) $ (18) $ (63) Recoveries 1 0 1 2 Additions/(releases) 5 (7) (3) (5) Other* (1) 0 (1) (2) Ending balance at December 31, 2019 $ 120 $ 54 $ 36 $ 210 Lease receivables $ 33 $ 23 $ 16 $ 72 Loan receivables $ 88 $ 31 $ 20 $ 138 Related allowance, collectively evaluated for impairment $ 25 $ 11 $ 4 $ 39 Related allowance, individually evaluated for impairment $ 96 $ 43 $ 32 $ 171 * Primarily represents translation adjustments.
Schedule of past due financing receivables	Amortized Billed Total Amortized Cost Invoices Amortized (Dollars in millions) Amortized Cost > 90 Days and > 90 Days and Cost Not At June 30, 2020: Cost > 90 Days (1) Accruing (1) Accruing Accruing (2) Americas $ 9,060 $ 323 $ 231 $ 30 $ 111 EMEA 4,932 115 31 5 89 Asia Pacific 3,201 48 20 4 29 Total client financing receivables $ 17,192 $ 486 $ 283 $ 38 $ 229 (1) At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. (2) Of the amortized cost not accruing, there is a related allowance of $171 million. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2020, respectively. Recorded Billed Recorded Total Recorded Investment Invoices Investment (Dollars in millions) Recorded Investment > 90 Days and > 90 Days and Not At December 31, 2019: Investment > 90 Days (1) Accruing (1) Accruing Accruing (2) Americas $ 3,419 $ 187 $ 147 $ 11 $ 41 EMEA 1,186 28 13 2 17 Asia Pacific 963 19 7 1 11 Total lease receivables $ 5,567 $ 234 $ 168 $ 14 $ 69 Americas $ 6,726 $ 127 $ 71 $ 11 $ 72 EMEA 3,901 77 8 3 72 Asia Pacific 2,395 26 6 2 21 Total loan receivables $ 13,022 $ 231 $ 85 $ 15 $ 166 Total $ 18,590 $ 465 $ 253 $ 29 $ 235 (1) At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. (2) Of the recorded investment not accruing, $191 million is individually evaluated for impairment with a related allowance of $171 million. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2019, respectively.
Schedule of net recorded investment by credit quality indicator	(Dollars in millions) Americas EMEA Asia Pacific At June 30, 2020: Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Vintage year: 2020 $ 1,556 $ 1,185 $ 925 $ 1,062 $ 548 $ 273 2019 2,076 1,187 922 836 719 271 2018 1,173 608 403 328 498 221 2017 582 257 107 170 266 77 2016 144 95 52 65 176 48 2015 and prior 57 140 37 27 80 24 Total $ 5,588 $ 3,472 $ 2,444 $ 2,487 $ 2,287 $ 914 (Dollars in millions) Lease Receivables Loan Receivables At December 31, 2019: Americas EMEA Asia Pacific Americas EMEA Asia Pacific Credit rating: Aaa – Aa3 $ 465 $ 54 $ 43 $ 1,028 $ 193 $ 189 A1 – A3 750 181 454 1,186 395 892 Baa1 – Baa3 955 409 147 1,882 1,527 619 Ba1 – Ba2 746 326 154 1,513 921 388 Ba3 – B1 215 140 101 471 564 205 B2 – B3 242 50 47 522 253 72 Caa – D 13 2 2 36 18 10 Total $ 3,385 $ 1,162 $ 947 $ 6,638 $ 3,871 $ 2,376

Leases (Tables)

Leases (Tables)	6 Months Ended
Leases (Tables)	Jun. 30, 2020
Leases
Schedule of amounts included in the Consolidated Income Statement related to lessor activity	Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Lease income — sales-type and direct financing leases Sales-type lease selling price $ 368 $ 179 $ 579 $ 328 Less: Carrying value of underlying assets* 117 74 194 129 Gross profit $ 251 $ 105 $ 385 $ 199 Interest income on lease receivables 65 73 139 151 Total sales-type and direct financing lease income $ 316 $ 178 $ 524 $ 350 Lease income — operating leases 68 82 139 172 Variable lease income 27 9 58 27 Total lease income $ 411 $ 269 $ 721 $ 548 * Excludes unguaranteed residual value.

Intangible Assets Including G_2

Intangible Assets Including Goodwill (Tables)	6 Months Ended
Intangible Assets Including Goodwill (Tables)	Jun. 30, 2020
Intangible Assets Including Goodwill
Intangible asset balances by major asset class	At June 30, 2020 Gross Carrying Accumulated Net Carrying (Dollars in millions) Amount Amortization Amount* Intangible asset class Capitalized software $ 1,759 $ (776) $ 983 Client relationships 8,665 (1,665) 7,000 Completed technology 5,964 (1,466) 4,498 Patents/trademarks 2,213 (445) 1,768 Other** 56 (35) 20 Total $ 18,656 $ (4,387) $ 14,270 At December 31, 2019 Gross Carrying Accumulated Net Carrying (Dollars in millions) Amount Amortization Amount* Intangible asset class Capitalized software $ 1,749 $ (743) $ 1,006 Client relationships 8,921 (1,433) 7,488 Completed technology 6,261 (1,400) 4,861 Patents/trademarks 2,301 (445) 1,856 Other** 56 (31) 24 Total $ 19,287 $ (4,052) $ 15,235 * Amounts as of June 30, 2020 and December 31, 2019 include a decrease in net intangible asset balances of $6 million and $42 million, respectively, due to foreign currency translation. ** Other intangibles are primarily acquired proprietary and non-proprietary business processes, methodologies and systems .
Intangible assets, future amortization expense	Capitalized Acquired (Dollars in millions) Software Intangibles Total Remainder of 2020 $ 288 $ 905 $ 1,193 2021 445 1,748 2,193 2022 215 1,686 1,901 2023 35 1,373 1,407 2024 0 1,323 1,323 Thereafter — 6,251 6,251
Changes in goodwill balances by reportable segment	Foreign Currency Purchase Translation (Dollars in millions) Balance Goodwill Price And Other Balance Segment 1/1/2020 Additions Adjustments Divestitures Adjustments 6/30/2020 Cloud & Cognitive Software $ 43,037 $ 11 $ (139) $ — $ (147) $ 42,762 Global Business Services 5,775 — — — (45) 5,730 Global Technology Services 7,141 — — — (61) 7,080 Systems 2,270 — — — (8) 2,261 Other—divested businesses — — — — — — Total $ 58,222 $ 11 $ (139) $ — $ (260) $ 57,833 Foreign Currency Purchase Translation (Dollars in millions) Balance Goodwill Price And Other Balance Segment 1/1/2019 Additions Adjustments Divestitures Adjustments 12/31/2019 Cloud & Cognitive Software* $ 24,463 $ 18,399 $ 133 $ — $ 41 $ 43,037 Global Business Services 4,711 1,059 1 (1) 5 5,775 Global Technology Services 3,988 3,119 — — 34 7,141 Systems 1,847 525 (110) — 7 2,270 Other—divested businesses* 1,256 — — (1,256) — — Total $ 36,265 $ 23,102 $ 24 $ (1,257) $ 87 $ 58,222 * Recast to conform to 2020 presentation. ** Primarily driven by foreign currency translation.

Borrowings (Tables)

Borrowings (Tables)	6 Months Ended
Borrowings (Tables)	Jun. 30, 2020
Borrowings
Short-Term Debt	At June 30, At December 31, (Dollars in millions) 2020 2019 Commercial paper $ 115 $ 304 Short-term loans 730 971 Long-term debt—current maturities 8,444 7,522 Total $ 9,289 $ 8,797
Long-Term Debt	Pre-Swap Borrowing Balance Balance (Dollars in millions) Maturities 6/30/2020 12/31/2019 U.S. dollar debt (weighted-average interest rate at June 30, 2020):* 2.2% 2020 $ 1,513 $ 4,326 1.6% 2021 5,536 8,498 2.6% 2022 6,246 6,289 3.3% 2023 2,403 2,388 3.3% 2024 5,041 5,045 6.6% 2025 654 636 3.3% 2026 4,350 4,350 3.0% 2027 2,219 969 6.5% 2028 313 313 3.5% 2029 3,250 3,250 2.0% 2030 1,350 — 5.9% 2032 600 600 8.0% 2038 83 83 4.5% 2039 2,745 2,745 2.9% 2040 650 — 4.0% 2042 1,107 1,107 7.0% 2045 27 27 4.7% 2046 650 650 4.3% 2049 3,000 3,000 3.0% 2050 750 — 7.1% 2096 316 316 $ 42,804 $ 44,594 Other currencies (weighted-average interest rate at June 30, 2020, in parentheses):* Euro (1.1%) 2020–2040 $ 18,545 $ 14,306 Pound sterling (2.7%) 2020–2022 1,301 1,390 Japanese yen (0.3%) 2022–2026 1,349 1,339 Other (3.1%) 2020–2022 203 375 $ 64,203 $ 62,003 Finance lease obligations (1.8%) 2021–2030 268 204 $ 64,470 $ 62,207 Less: net unamortized discount 892 881 Less: net unamortized debt issuance costs 165 142 Add: fair value adjustment** 480 440 $ 63,893 $ 61,624 Less: current maturities 8,444 7,522 Total $ 55,449 $ 54,102 * Includes notes, debentures, bank loans and secured borrowings. ** The portion of the company’s fixed-rate debt obligations that was hedged was reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates.
Pre-swap annual contractual obligations of long-term debt outstanding	Pre-swap annual contractual obligations of long-term debt outstanding at June 30, 2020, are as follows: (Dollars in millions) Total Remainder of 2020 $ 4,366 2021 6,937 2022 7,194 2023 5,417 2024 6,324 Thereafter 34,232 Total $ 64,470
Interest on Debt	(Dollars in millions) For the six months ended June 30: 2020 2019 Cost of financing $ 237 $ 343 Interest expense 649 558 Interest capitalized 5 3 Total interest paid and accrued $ 891 $ 904

Commitments (Tables)

Commitments (Tables)	6 Months Ended
Commitments (Tables)	Jun. 30, 2020
Commitments
Changes in warranty liabilities	Standard Warranty Liability (Dollars in millions) 2020 2019 Balance at January 1 $ 113 $ 118 Current period accruals 43 45 Accrual adjustments to reflect actual experience (14) (1) Charges incurred (49) (59) Balance at June 30 $ 93 $ 103 Extended Warranty Liability (Dollars in millions) 2020 2019 Balance at January 1 $ 477 $ 533 Revenue deferred for new extended warranty contracts 93 81 Amortization of deferred revenue (115) (128) Other* (9) 0 Balance at June 30 $ 445 $ 486 Current portion $ 216 $ 225 Noncurrent portion $ 228 $ 260 * Other primarily consists of foreign currency translation adjustments.

Equity Activity (Tables)

Equity Activity (Tables)	6 Months Ended
Equity Activity (Tables)	Jun. 30, 2020
Equity Activity
Reclassifications and taxes related to items of other comprehensive income	(Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended June 30, 2020: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ 4 $ 135 $ 139 Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 1 $ 0 $ 1 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 1 $ 0 $ 1 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (36) $ 9 $ (26) Reclassification of (gains)/losses to: Cost of services 1 0 1 Cost of sales (9) 3 (7) Cost of financing 7 (2) 5 SG&A expense (7) 2 (5) Other (income) and expense (70) 18 (52) Interest expense 19 (5) 15 Total unrealized gains/(losses) on cash flow hedges $ (94) $ 25 $ (70) Retirement-related benefit plans (1): Prior service costs/(credits) $ — $ 0 $ 0 Net (losses)/gains arising during the period 57 (22) 35 Curtailments and settlements 13 (4) 9 Amortization of prior service (credits)/costs 0 1 1 Amortization of net (gains)/losses 566 (155) 411 Total retirement-related benefit plans $ 637 $ (180) $ 457 Other comprehensive income/(loss) $ 548 $ (21) $ 527 (1) These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended June 30, 2019: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ 5 $ 37 $ 42 Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ (2) $ 0 $ (1) Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ (2) $ 0 $ (1) Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (6) $ 2 $ (4) Reclassification of (gains)/losses to: Cost of services (20) 5 (15) Cost of sales (11) 3 (8) Cost of financing 25 (6) 18 SG&A expense (12) 3 (9) Other (income) and expense (202) 51 (151) Interest expense 52 (13) 39 Total unrealized gains/(losses) on cash flow hedges $ (175) $ 45 $ (129) Retirement-related benefit plans (1): Net (losses)/gains arising during the period $ 116 $ (25) $ 92 Curtailments and settlements 3 0 3 Amortization of prior service (credits)/costs (3) 0 (3) Amortization of net (gains)/losses 460 (123) 337 Total retirement-related benefit plans $ 576 $ (147) $ 430 Other comprehensive income/(loss) $ 405 $ (64) $ 340 (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the six months ended June 30, 2020: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ (915) $ 13 $ (902) Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 1 $ 0 $ 1 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 1 $ 0 $ 1 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (216) $ 55 $ (162) Reclassification of (gains)/losses to: Cost of services (9) 2 (6) Cost of sales (18) 5 (13) Cost of financing 15 (4) 11 SG&A expense (17) 4 (13) Other (income) and expense 19 (5) 15 Interest expense 41 (10) 31 Total unrealized gains/(losses) on cash flow hedges $ (184) $ 47 $ (137) Retirement-related benefit plans (1): Prior service costs/(credits) $ (4) $ 1 $ (3) Net (losses)/gains arising during the period 65 (24) 41 Curtailments and settlements 21 (6) 15 Amortization of prior service (credits)/costs 1 1 2 Amortization of net (gains)/losses 1,136 (312) 824 Total retirement-related benefit plans $ 1,219 $ (341) $ 879 Other comprehensive income/(loss) $ 121 $ (281) $ (160) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the six months ended June 30, 2019: Amount Benefit Amount Other comprehensive income/(loss): Foreign currency translation adjustments $ 176 $ 38 $ 214 Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ (3) $ 1 $ (2) Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ (3) $ 1 $ (2) Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (359) $ 87 $ (272) Reclassification of (gains)/losses to: Cost of services (29) 8 (22) Cost of sales (30) 8 (21) Cost of financing 53 (13) 40 SG&A expense (34) 9 (25) Other (income) and expense (115) 29 (86) Interest expense 86 (22) 64 Total unrealized gains/(losses) on cash flow hedges $ (429) $ 106 $ (323) Retirement-related benefit plans (1): Net (losses)/gains arising during the period $ 113 $ (24) $ 89 Curtailments and settlements 4 0 4 Amortization of prior service (credits)/costs (6) 1 (5) Amortization of net (gains)/losses 924 (252) 671 Total retirement-related benefit plans $ 1,035 $ (275) $ 760 Other comprehensive income/(loss) $ 779 $ (131) $ 649 (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information.
Accumulated other comprehensive income/(loss) (net of tax)	Net Change Net Unrealized Net Unrealized Foreign Retirement- Gains/(Losses) Accumulated Gains/(Losses) Currency Related on Available- Other on Cash Flow Translation Benefit For-Sale Comprehensive (Dollars in millions) Hedges Adjustments* Plans Securities Income/(Loss) January 1, 2020 $ (179) $ (3,700) $ (24,718) $ 0 $ (28,597) Other comprehensive income before reclassifications (162) (902) 38 1 (1,025) Amount reclassified from accumulated other comprehensive income 25 — 841 — 866 Total change for the period $ (137) $ (902) $ 879 $ 1 $ (160) June 30, 2020 $ (316) $ (4,602) $ (23,839) $ 1 $ (28,757) * Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. Net Change Net Unrealized Net Unrealized Foreign Retirement- Gains/(Losses) Accumulated Gains/(Losses) Currency Related on Available- Other on Cash Flow Translation Benefit For-Sale Comprehensive (Dollars in millions) Hedges Adjustments* Plans Securities Income/(Loss) January 1, 2019 $ 284 $ (3,690) $ (26,083) $ 0 $ (29,490) Other comprehensive income before reclassifications (272) 214 89 (2) 29 Amount reclassified from accumulated other comprehensive income (51) — 671 — 620 Total change for the period $ (323) $ 214 $ 760 $ (2) $ 649 June 30, 2019 $ (39) $ (3,477) $ (25,323) $ (2) $ (28,841) *

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	6 Months Ended
Derivative Financial Instruments (Tables)	Jun. 30, 2020
Derivative Financial Instruments
Amounts related to cumulative basis adjustments for fair value hedges	June 30, December 31, (Dollars in millions) 2020 2019 Short-term debt: Carrying amount of the hedged item $ (1,313) $ — Cumulative hedging adjustments included in the carrying amount - assets/(liabilities) (14) — Long-term debt: Carrying amount of the hedged item $ (2,138) $ (3,411) Cumulative hedging adjustments included in the carrying amount - assets/(liabilities) (466) (1) (440) (1) (1) Includes ($378) million and ($404) million of hedging adjustments on discontinued hedging relationships at June 30, 2020 and December 31, 2019, respectively.
Effect of derivative instruments in the consolidated income statement	Gains/(Losses) of (Dollars in millions) Total Total Hedge Activity For the three months ended June 30: 2020 2019 2020 2019 Cost of services $ 7,520 $ 8,181 * $ (1) $ 20 Cost of sales 1,739 1,741 * 9 11 Cost of financing 165 228 2 (18) SG&A expense 5,248 5,456 157 38 Other (income) and expense 179 (747) 92 271 Interest expense 323 348 7 (39) * Reclassified to conform to current period presentation. Gain (Loss) Recognized in Consolidated Income Statement Consolidated Recognized on Attributable to Risk (Dollars in millions) Income Statement Derivatives Being Hedged (2) For the three months ended June 30: Line Item 2020 2019 2020 2019 Derivative instruments in fair value hedges (1): Interest rate contracts Cost of financing $ 3 $ 23 $ 3 $ (20) Interest expense 8 48 8 (43) Derivative instruments not designated as hedging instruments: Foreign exchange contracts Other (income) and expense 22 69 N/A N/A Equity contracts SG&A expense 150 26 N/A N/A Total $ 183 $ 165 $ 11 $ (64) Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income (Dollars in millions) Consolidated Reclassified Amounts Excluded from For the three months Recognized in OCI Income Statement from AOCI Effectiveness Testing (3) ended June 30: 2020 2019 Line Item 2020 2019 2020 2019 Derivative instruments in cash flow hedges: Interest rate contracts $ — $ 3 Cost of financing $ (1) $ (1) $ — $ — Interest expense (3) (2) — — Foreign exchange contracts (36) (10) Cost of services (1) 20 — — Cost of sales 9 11 — — Cost of financing (6) (24) — — SG&A expense 7 12 — — Other (income) and expense 70 202 — — Interest expense (16) (51) — — Instruments in net investment hedges (4): Foreign exchange contracts (535) (148) Cost of financing — — 4 4 Interest expense — — 10 9 Total $ (571) $ (154) $ 59 $ 168 $ 14 $ 13 (1) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts. (2) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period. (3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period. (4) Instruments in net investment hedges include derivative and non-derivative instruments. N/A - not applicable Gains/(Losses) of (Dollars in millions) Total Total Hedge Activity For the six months ended June 30: 2020 2019 2020 2019 Cost of services $ 15,363 $ 16,453 * $ 9 $ 29 Cost of sales 3,363 3,344 * 18 30 Cost of financing 345 492 6 (36) SG&A expense 11,203 10,147 (34) 179 Other (income) and expense 361 (820) (9) 202 Interest expense 649 558 16 (59) * Reclassified to conform to current period presentation. Gain (Loss) Recognized in Consolidated Income Statement Consolidated Recognized on Attributable to Risk (Dollars in millions) Income Statement Derivatives Being Hedged (2) For the six months ended June 30: Line Item 2020 2019 2020 2019 Derivative instruments in fair value hedges (1): Interest rate contracts Cost of financing $ 21 $ 55 $ (11) $ (50) Interest expense 56 90 (29) (82) Derivative instruments not designated as hedging instruments: Foreign exchange contracts Other (income) and expense 10 87 N/A N/A Equity contracts SG&A expense (51) 145 N/A N/A Total $ 37 $ 377 $ (39) $ (132) Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income (Dollars in millions) Consolidated Reclassified Amounts Excluded from For the six months Recognized in OCI Income Statement from AOCI Effectiveness Testing (3) ended June 30: 2020 2019 Line Item 2020 2019 2020 2019 Derivative instruments in cash flow hedges: Interest rate contracts $ — $ (168) Cost of financing $ (2) $ (1) $ — $ — Interest expense (6) (1) — — Foreign exchange contracts (216) (191) Cost of services 9 29 — — Cost of sales 18 30 — — Cost of financing (13) (52) — — SG&A expense 17 34 — — Other (income) and expense (19) 115 — — Interest expense (35) (85) — — Instruments in net investment hedges (4): Foreign exchange contracts (50) (128) Cost of financing — — 11 12 Interest expense — — 30 19 Total $ (266) $ (487) $ (32) $ 70 $ 41 $ 30 (1) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts. (2) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period. (3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period. (4) Instruments in net investment hedges include derivative and non-derivative instruments. N/A - not applicable

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
Stock-Based Compensation (Tables)	Jun. 30, 2020
Stock-Based Compensation
Stock-based compensation cost included in income from continuing operations	Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 Cost $ 40 $ 22 $ 67 $ 42 Selling, general and administrative 155 93 272 167 Research, development and engineering 52 21 97 39 Pre-tax stock-based compensation cost $ 247 $ 135 $ 436 $ 248 Income tax benefits (52) (29) (96) (54) Total net stock-based compensation cost $ 196 $ 106 $ 340 $ 194

Retirement-Related Benefits (Ta

Retirement-Related Benefits (Tables)	6 Months Ended
Retirement-Related Benefits (Tables)	Jun. 30, 2020
Retirement-Related Benefits
Pre-tax cost for all retirement-related plans	Yr. to Yr. (Dollars in millions) Percent For the three months ended June 30: 2020 2019 Change Retirement-related plans — cost Defined benefit and contribution pension plans — cost $ 596 $ 441 34.9 % Nonpension postretirement plans — cost 50 53 (5.6) Total $ 645 $ 494 30.6 % Yr. to Yr. (Dollars in millions) Percent For the six months ended June 30: 2020 2019 Change Retirement-related plans — cost Defined benefit and contribution pension plans — cost $ 1,179 $ 878 34.3 % Nonpension postretirement plans — cost 102 107 (4.8) Total $ 1,281 $ 985 30.0 %
Components of the cost/(income) for the company's pension plans	(Dollars in millions) U.S. Plans Non-U.S. Plans For the three months ended June 30: 2020 2019 2020 2019 Service cost $ — $ — $ 95 $ 93 Interest cost (1) 375 469 137 206 Expected return on plan assets (1) (542) (650) (311) (396) Amortization of prior service costs/(credits) (1) 4 4 (5) (7) Recognized actuarial losses (1) 207 139 340 312 Curtailments and settlements (1) — — 13 3 Multi-employer plans — — 7 8 Other costs/(credits) (1) — — 9 6 Total net periodic pension (income)/cost of defined benefit plans $ 44 $ (37) $ 284 $ 225 Cost of defined contribution plans 154 140 113 114 Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement $ 198 $ 103 $ 397 $ 339 (Dollars in millions) U.S. Plans Non-U.S. Plans For the six months ended June 30: 2020 2019 2020 2019 Service cost $ — $ — $ 190 $ 185 Interest cost (1) 750 941 266 413 Expected return on plan assets (1) (1,084) (1,300) (620) (795) Amortization of prior service costs/(credits) (1) 8 8 (9) (13) Recognized actuarial losses (1) 415 279 682 626 Curtailments and settlements (1) — — 21 4 Multi-employer plans — — 14 17 Other costs/(credits) (1) — — 14 11 Total net periodic pension (income)/cost of defined benefit plans $ 89 $ (71) $ 559 $ 449 Cost of defined contribution plans 309 289 223 212 Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement $ 398 $ 218 $ 782 $ 661 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement.
Components of the cost/(income) for the company's nonpension postretirement plans	(Dollars in millions) U.S. Plan Non-U.S. Plans For the three months ended June 30: 2020 2019 2020 2019 Service cost $ 2 $ 3 $ 1 $ 1 Interest cost (1) 26 36 8 12 Expected return on plan assets (1) — — (1) (1) Amortization of prior service costs/(credits) (1) 1 (1) 0 0 Recognized actuarial losses (1) 7 0 5 3 Curtailments and settlements (1) — — — — Total nonpension postretirement plans cost recognized in Consolidated Income Statement $ 36 $ 38 $ 14 $ 15 (Dollars in millions) U.S. Plan Non-U.S. Plans For the six months ended June 30: 2020 2019 2020 2019 Service cost $ 4 $ 5 $ 3 $ 3 Interest cost (1) 51 73 18 25 Expected return on plan assets (1) — — (2) (3) Amortization of prior service costs/(credits) (1) 2 (1) 0 0 Recognized actuarial losses (1) 15 0 11 5 Curtailments and settlements (1) — — 0 0 Total nonpension postretirement plans cost recognized in Consolidated Income Statement $ 72 $ 77 $ 29 $ 30 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. The company does not anticipate any significant changes to the expected plan contributions in 2020 from the amounts disclosed in the 2019 Annual Report.
Schedule of contributions	- Plan Contributions Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2020 2019 2020 2019 U.S. nonpension postretirement benefit plan $ 65 $ 33 $ 200 $ 227 Non-U.S. DB and multi-employer plans 29 34 111 128 Total plan contributions $ 94 $ 66 $ 311 $ 355

Basis of Presentation (Details)

Basis of Presentation (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
Basis of Presentation (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Provision for/(benefit from) income taxes	$ 209		$ 269	$ (1,017)	$ 558
Deferred tax asset from intra-entity sale		$ 3,442
Net one-time benefit		$ 939
Other (income) and expense
Noncontrolling interest amounts, net of tax	$ 6.8		$ 4.9	$ 11.3	$ 11.9

Basis of Presentation - Reclass

Basis of Presentation - Reclassification (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended			12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019		Jun. 30, 2020	Jun. 30, 2019		Dec. 31, 2019
Revenues	$ 18,123	$ 19,161		$ 35,694	$ 37,342		$ 77,000
Cost of Revenue	9,423	10,151		19,071	20,290
Services
Revenues	10,937	11,836	[1]	22,311	23,751	[1]
Cost of Revenue	7,520	8,181	[1]	15,363	16,453	[1]
Sales
Revenues	6,918	6,974	[1]	12,813	12,836	[1]
Cost of Revenue	$ 1,739	1,741	[1]	$ 3,363	3,344	[1]
Adjustment
Revenues							$ 300
Adjustment \| Services
Revenues		(500)			(1,000)
Cost of Revenue		(100)			(200)
Adjustment \| Sales
Revenues		500			1,000
Cost of Revenue		$ 100			$ 200

[1]	Reclassified to conform to current period presentation. Refer to note 1, “Basis of Presentation,” for additional information.

Accounting Changes - Credit Los

Accounting Changes - Credit Losses (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Accounting Changes
Deferred tax assets	$ 8,689	$ 5,182
Retained earnings	$ 162,559	162,954
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment
Accounting Changes
Allowance for credit losses		81
Deferred tax assets		(14)
Retained earnings		$ (66)

Accounting Changes - Leases (De

Accounting Changes - Leases (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Dec. 31, 2018
Leases
Operating right-of-use assets	$ 4,774	$ 4,996
Finance lease obligations	$ 268	$ 204
Accounting Standards Update 2016-02, Leases \| Cumulative Effect, Period of Adoption, Adjustment
Leases
Operating right-of-use assets			$ 4,800
Financing right-of-use assets			200
Operating lease liabilities			5,100
Finance lease obligations			$ 200

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of Revenue by Major Products/Service Offerings (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Revenue by Major Products/Service Offerings
Total Revenue	$ 18,123	$ 19,161	$ 35,694	$ 37,342	$ 77,000
External Revenue
Revenue by Major Products/Service Offerings
Total Revenue	18,072	18,701	35,581	36,432
Other
Revenue by Major Products/Service Offerings
Revenue	50	460	113	911
Cloud & Cognitive Software \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	5,748	5,563	10,987	10,530
Total Revenue	5,748	5,563	10,987	10,530
Global Business Services \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	3,890	4,197	8,027	8,353
Total Revenue	3,890	4,197	8,027	8,353
Global Technology Services \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	6,316	6,837	12,783	13,711
Total Revenue	6,316	6,837	12,783	13,711
Systems \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,852	1,753	3,220	3,081
Total Revenue	1,852	1,753	3,220	3,081
Global Financing \| External Revenue
Revenue by Major Products/Service Offerings
Financial Services Revenue	265	351	564	757
Total Revenue	265	351	564	757
Cognitive Applications \| Cloud & Cognitive Software \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,246	1,372	2,428	2,609
Cloud & Data Platforms \| Cloud & Cognitive Software \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	2,797	2,173	5,333	4,090
Transaction Processing Platforms \| Cloud & Cognitive Software \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,706	2,018	3,226	3,830
Consulting \| Global Business Services \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,936	2,020	4,007	4,021
Application Management \| Global Business Services \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,734	1,919	3,573	3,827
Global Process Services \| Global Business Services \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	221	258	447	505
Infrastructure & Cloud Services \| Global Technology Services \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	4,813	5,174	9,729	10,383
Technology Support Services \| Global Technology Services \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,503	1,663	3,054	3,328
Systems Hardware \| Systems \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,488	1,328	2,484	2,241
Operating Systems Software \| Systems \| External Revenue
Revenue by Major Products/Service Offerings
Revenue	$ 365	$ 425	$ 736	$ 840

Revenue Recognition - Disaggr_2

Revenue Recognition - Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Revenue by Geography
Revenues	$ 18,123	$ 19,161	$ 35,694	$ 37,342	$ 77,000
Americas
Revenue by Geography
Revenues	8,450	8,806	16,617	17,299
EMEA
Revenue by Geography
Revenues	5,695	6,149	11,212	11,876
Asia Pacific
Revenue by Geography
Revenues	$ 3,977	$ 4,205	$ 7,865	$ 8,167

Revenue Recognition - Remaining

Revenue Recognition - Remaining Performance Obligations (Details) - USD ($) $ in Billions	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Revenue Recognition
Practical expedient, remaining performance obligations	true	true
Remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied	$ 117

Revenue Recognition - Remaini_2

Revenue Recognition - Remaining Performance Obligations, Expected Timing of Satisfaction (Details)	Jun. 30, 2020
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	60.00%
Duration of expected recognition period for remaining performance obligation	2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	35.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 \| Minimum
Remaining Performance Obligations
Duration of expected recognition period for remaining performance obligation	3 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 \| Maximum
Remaining Performance Obligations
Duration of expected recognition period for remaining performance obligation	5 years

Revenue Recognition - Performan

Revenue Recognition - Performance Obligations Satisfied or Partially Satisfied in Prior Periods (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Revenue Recognition
Impact to revenue from performance obligations satisfied (or partially satisfied) in previous periods	$ (56)	$ (54)

Revenue Recognition - Reconcili

Revenue Recognition - Reconciliation of Contract Balances (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Reconciliation of Contract Balances
Notes and accounts receivable - trade (net of allowances of $369 in 2020 and $299 in 2019)	$ 6,543	$ 7,870
Notes and accounts receivable - trade, allowances	369	299
Contract assets	505	492
Deferred income (current)	12,469	12,026
Deferred income (noncurrent)	3,787	3,851
Revenue recognized that was included in deferred income at the beginning of the period	$ 4,500	$ 6,500

Revenue Recognition - Trade all

Revenue Recognition - Trade allowance for credit losses - NEW (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Roll forward of notes and accounts receivable - trade allowance for credit losses
Allowance for Credit Loss, Beginning Balance	$ 299	$ 309
Additions / (Releases)	87	98
Write-offs	(26)	(113)
Other	(8)	5
Allowance for Credit Loss, Ending Balance	369	299
Cumulative Effect, Period of Adoption, Adjustment
Roll forward of notes and accounts receivable - trade allowance for credit losses
Allowance for Credit Loss, Beginning Balance	$ 316
Allowance for Credit Loss, Ending Balance		$ 316

Segments - Results of Continuin

Segments - Results of Continuing Operations (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Segment Information
Revenue	$ 18,123	$ 19,161	$ 35,694	$ 37,342	$ 77,000
Pre-tax income from continuing operations	1,571	2,768	1,522	4,651
External Revenue
Segment Information
Revenue	18,072	18,701	35,581	36,432
External Revenue \| Cloud & Cognitive Software
Segment Information
Revenue	5,748	5,563	10,987	10,530
External Revenue \| Global Business Services
Segment Information
Revenue	3,890	4,197	8,027	8,353
External Revenue \| Global Technology Services
Segment Information
Revenue	6,316	6,837	12,783	13,711
External Revenue \| Systems
Segment Information
Revenue	1,852	1,753	3,220	3,081
External Revenue \| Global Financing
Segment Information
Revenue	265	351	564	757
Internal transactions
Segment Information
Revenue	(1,582)	(1,430)	(3,096)	(3,097)
Pre-tax income from continuing operations	(121)	(60)	(176)	(149)
Internal transactions \| Cloud & Cognitive Software
Segment Information
Revenue	(743)	(607)	(1,556)	(1,448)
Internal transactions \| Global Business Services
Segment Information
Revenue	(55)	(69)	(101)	(143)
Internal transactions \| Global Technology Services
Segment Information
Revenue	(304)	(302)	(599)	(591)
Internal transactions \| Systems
Segment Information
Revenue	(240)	(171)	(388)	(334)
Internal transactions \| Global Financing
Segment Information
Revenue	(241)	(281)	(453)	(581)
Business Segments
Segment Information
Revenue	19,655	20,131	38,677	39,529
Pre-tax income from continuing operations	$ 2,744	$ 2,832	$ 3,747	$ 5,276
Revenue year-to-year change (as a percent)	(2.40%)		(2.20%)
Pre-tax income year-to-year change (as a percent)	(3.10%)		(29.00%)
Pre-tax income/(loss) margin (as a percent)	14.00%	14.10%	9.70%	13.30%
Business Segments \| Cloud & Cognitive Software
Segment Information
Revenue	$ 6,491	$ 6,170	$ 12,543	$ 11,978
Pre-tax income from continuing operations	$ 1,708	$ 2,007	$ 2,641	$ 3,792
Revenue year-to-year change (as a percent)	5.20%		4.70%
Pre-tax income year-to-year change (as a percent)	(14.90%)		(30.40%)
Pre-tax income/(loss) margin (as a percent)	26.30%	32.50%	21.10%	31.70%
Business Segments \| Global Business Services
Segment Information
Revenue	$ 3,945	$ 4,266	$ 8,128	$ 8,495
Pre-tax income from continuing operations	$ 362	$ 290	$ 633	$ 587
Revenue year-to-year change (as a percent)	(7.50%)		(4.30%)
Pre-tax income year-to-year change (as a percent)	25.10%		7.80%
Pre-tax income/(loss) margin (as a percent)	9.20%	6.80%	7.80%	6.90%
Business Segments \| Global Technology Services
Segment Information
Revenue	$ 6,621	$ 7,139	$ 13,382	$ 14,303
Pre-tax income from continuing operations	$ 250	$ 235	$ 72	$ 510
Revenue year-to-year change (as a percent)	(7.30%)		(6.40%)
Pre-tax income year-to-year change (as a percent)	6.40%		(85.90%)
Pre-tax income/(loss) margin (as a percent)	3.80%	3.30%	0.50%	3.60%
Business Segments \| Systems
Segment Information
Revenue	$ 2,092	$ 1,924	$ 3,608	$ 3,415
Pre-tax income from continuing operations	$ 248	$ 61	$ 31	$ (141)
Revenue year-to-year change (as a percent)	8.70%		5.70%
Pre-tax income year-to-year change (as a percent)	304.80%
Pre-tax income/(loss) margin (as a percent)	11.80%	3.20%	0.90%	(4.10%)
Business Segments \| Global Financing
Segment Information
Revenue	$ 506	$ 632	$ 1,017	$ 1,338
Pre-tax income from continuing operations	$ 176	$ 239	$ 370	$ 527
Revenue year-to-year change (as a percent)	(20.00%)		(24.00%)
Pre-tax income year-to-year change (as a percent)	(26.20%)		(29.80%)
Pre-tax income/(loss) margin (as a percent)	34.90%	37.80%	36.40%	39.40%
Adjustment
Segment Information
Revenue					$ 300

Segments - Revenue Reconciliati

Segments - Revenue Reconciliation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Revenue
Revenue	$ 18,123	$ 19,161	$ 35,694	$ 37,342	$ 77,000
Business Segments
Revenue
Revenue	19,655	20,131	38,677	39,529
Other
Revenue
Other - divested businesses	13	403	32	780
Other revenue	37	57	81	131
Internal transactions
Revenue
Revenue	$ (1,582)	$ (1,430)	$ (3,096)	$ (3,097)

Segments - Pre-Tax Income Recon

Segments - Pre-Tax Income Reconciliation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Pre-tax income from continuing operations
Amortization of acquired intangible assets	$ (472)	$ (169)	$ (945)	$ (343)
Acquisition-related (charges)/income	(1)	(102)	(2)	(141)
Non-operating retirement-related (costs)/income	(273)	(136)	(538)	(274)
Other - divested businesses	(22)	561	3	505
Income from continuing operations before income taxes	1,571	2,768	1,522	4,651
Business Segments
Pre-tax income from continuing operations
Income from continuing operations before income taxes	2,744	2,832	3,747	5,276
Internal transactions
Pre-tax income from continuing operations
Income from continuing operations before income taxes	(121)	(60)	(176)	(149)
Unallocated corporate amounts
Pre-tax income from continuing operations
Income from continuing operations before income taxes	$ (283)	$ (156)	$ (568)	$ (224)

Acquisitions_Divestitures (Deta

Acquisitions/Divestitures (Details) $ / shares in Units, $ in Billions	Jul. 09, 2019USD ($)$ / shares	Jun. 30, 2020item	Mar. 31, 2020item	Jun. 30, 2020item
Acquisitions
Percentage of business acquired (as a percent)		100.00%		100.00%
Red Hat, Inc.
Acquisitions
Percentage of business acquired (as a percent)	100.00%
Cash paid to acquiree shareholders (in dollars per share) \| $ / shares	$ 190
Aggregate acquisitions cost	$ 35
Businesses acquired, cash consideration	$ 34
Cloud & Cognitive Software
Acquisitions
Number of acquisitions \| item		1	1	2

Acquisitions_Divestitures - Pur

Acquisitions/Divestitures - Purchase Price Allocation (Details) - USD ($) $ in Millions	Jul. 09, 2019	Jun. 30, 2020	Dec. 31, 2019	Dec. 31, 2018
Acquisitions
Goodwill		$ 57,833	$ 58,222	$ 36,265
Red Hat, Inc.
Acquisitions
Current assets	$ 3,186
Property, plant, and equipment/noncurrent assets	948
Goodwill	22,986	$ 23,000
Total assets acquired	40,592
Current liabilities	1,395
Noncurrent liabilities	4,117
Total liabilities assumed	5,513
Total purchase price	$ 35,080
Acquired intangible asset, weighted average useful life	10 years 10 months 24 days
Cash and cash equivalents	$ 2,200
Short-term debt	485
Red Hat, Inc. \| Completed technology
Acquisitions
Intangible assets	$ 4,571
Acquired intangible asset, weighted average useful life	9 years
Red Hat, Inc. \| Client relationships
Acquisitions
Intangible assets	$ 7,215
Acquired intangible asset, weighted average useful life	10 years
Red Hat, Inc. \| Trademarks
Acquisitions
Intangible assets	$ 1,686
Acquired intangible asset, weighted average useful life	20 years

Acquisitions_Divestitures - Goo

Acquisitions/Divestitures - Goodwill (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jul. 09, 2019	Dec. 31, 2018
Acquisitions
Goodwill	$ 57,833	$ 58,222		$ 36,265
Red Hat, Inc.
Acquisitions
Goodwill	$ 23,000		$ 22,986
Expected percent of goodwill deductible for tax purposes	6.00%
Cloud & Cognitive Software \| Red Hat, Inc.
Acquisitions
Goodwill	$ 18,400
Global Technology Services \| Red Hat, Inc.
Acquisitions
Goodwill	3,100
Global Business Services \| Red Hat, Inc.
Acquisitions
Goodwill	1,100
Systems \| Red Hat, Inc.
Acquisitions
Goodwill	$ 400

Acquisitions_Divestitures - Div

Acquisitions/Divestitures - Divestitures (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jun. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Select Standalone Cloud and Cognitive Software Products
Divestitures
Consideration	$ 1,775				$ 1,775
Contingent consideration included in total	$ 150				150
Cash consideration received		$ 812		$ 812	812
Contingent consideration received			$ 40
Amount of consideration received that was previously transferred as a participating interest to a third-party bank		(165)
Cash payments by IBM for deferred revenue earned and received post divestiture		$ 81		219
Pre-tax gain on sale of business				637
Period after closing to receive outstanding contingent consideration	27 months
Select Marketing Platform and Commerce Offerings
Divestitures
Pre-tax gain on sale of business				$ 75
Select Marketing Platform and Commerce Offerings \| U.S.
Divestitures
Cash consideration received	$ 240
Remaining consideration to be received	$ 150				$ 150
Period after closing for receipt of remaining consideration	36 months
Sales Performance Management Offerings
Divestitures
Cash consideration received						$ 230
Pre-tax gain on sale of business						$ 136

Earnings Per Share of Common _3

Earnings Per Share of Common Stock - Computation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Weighted-average number of shares on which earnings per share calculations are based
Weighted-average shares outstanding during period (in shares)	889,435,166	886,273,682	888,702,256	887,927,612
Add - Incremental shares under stock-based compensation plans (in shares)	4,290,365	3,281,570	5,015,390	3,327,015
Add - Incremental shares associated with contingently issuable shares (in shares)	1,213,549	1,276,549	1,271,513	1,116,537
Assuming dilution (in shares)	894,939,080	890,831,801	894,989,159	892,371,164
Net income on which basic earnings per share is calculated
Income from continuing operations	$ 1,362	$ 2,499	$ 2,538	$ 4,093
Income/(loss) from discontinued operations, net of tax	(1)	(1)	(2)	(4)
Net income on which basic earnings per share is calculated	1,361	2,498	2,536	4,089
Net income on which diluted earnings per share is calculated
Income from continuing operations	1,362	2,499	2,538	4,093
Net income applicable to contingently issuable shares		0	(2)	0
Income from continuing operations on which diluted earnings per share is calculated	1,362	2,500	2,536	4,093
Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated	(1)	(1)	(2)	(4)
Net income on which diluted earnings per share is calculated	$ 1,361	$ 2,499	$ 2,534	$ 4,090
Assuming dilution
Continuing operations (in dollars per share)	$ 1.52	$ 2.81	$ 2.83	$ 4.58
Discontinued operations (in dollars per share)	0	0	0	0
Total (in dollars per share)	1.52	2.81	2.83	4.58
Basic
Continuing operations (in dollars per share)	1.53	2.82	2.85	4.61
Discontinued operations (in dollars per share)	0	0	0	0
Total (in dollars per share)	$ 1.53	$ 2.82	$ 2.85	$ 4.61

Earnings Per Share of Common _4

Earnings Per Share of Common Stock - Antidilutive Stock Options (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock Options
Antidilutive stock options
Outstanding stock options not included in the computation of diluted earnings per share (in shares)	1,511,989	762,019	1,324,444	949,519

Financial Assets & Liabilitie_2

Financial Assets & Liabilities - Impairment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Financial Assets & Liabilities
Impairment for credit losses	$ 0		$ 0
Non-credit impairment	$ 0		$ 0
Available-for-sale securities impairment		$ 0		$ 0

Financial Assets & Liabilitie_3

Financial Assets & Liabilities - Fair Value Measurements (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Financial assets and financial liabilities measured at fair value on a recurring basis:
Debt securities - current	$ 2,063	$ 696
Potential reduction in net position of total derivative assets	220	194
Potential reduction in net position of total derivative liabilities	220	194
Recurring
Financial assets and financial liabilities measured at fair value on a recurring basis:
Cash equivalents	8,712	4,819
Total assets	11,104	5,823
Total liabilities	491	673
Recurring \| Prepaid expenses and other current assets
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative assets	195	149
Recurring \| Investments and sundry assets
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative assets	112	94
Recurring \| Other accrued expenses and liabilities
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative liabilities	289	167
Recurring \| Other liabilities
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative liabilities	202	506
Recurring \| Level 1
Financial assets and financial liabilities measured at fair value on a recurring basis:
Equity investments	0	0
Recurring \| Level 1 \| Money market funds
Financial assets and financial liabilities measured at fair value on a recurring basis:
Cash equivalents	926	427
Recurring \| Level 2
Financial assets and financial liabilities measured at fair value on a recurring basis:
Debt securities - current	2,063	696
Debt securities - noncurrent	22	65
Recurring \| Level 2 \| Interest rate contracts
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivatives designated as hedging - Assets	126	56
Recurring \| Level 2 \| Foreign exchange contracts
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivatives designated as hedging - Assets	161	175
Derivatives designated as hedging - Liabilities	468	635
Derivatives not designated as hedging - Assets	8	10
Derivatives not designated as hedging - Liabilities	18	33
Recurring \| Level 2 \| Time deposits and certificates of deposit
Financial assets and financial liabilities measured at fair value on a recurring basis:
Cash equivalents	7,785	4,392
Recurring \| Level 1 And 2 \| Equity contracts
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivatives not designated as hedging - Assets	11	1
Derivatives not designated as hedging - Liabilities	$ 4	$ 4
Maximum \| Debt \| Investments and sundry assets
Financial assets and financial liabilities measured at fair value on a recurring basis:
Term of debt instrument	2 years

Financial Assets & Liabilitie_4

Financial Assets & Liabilities - Not Measured at Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Long-Term Debt
Long-term debt	$ 55,449	$ 54,102
Fair value of long-term debt	$ 61,600	$ 58,431

Financing Receivables - Payment

Financing Receivables - Payment Terms (Details)	6 Months Ended
Financing Receivables - Payment Terms (Details)	Jun. 30, 2020
Lease receivables \| Minimum
Financing receivables
Financing receivable, payment terms	2 years
Lease receivables \| Maximum
Financing receivables
Financing receivable, payment terms	6 years
Commercial financing receivables \| Minimum
Financing receivables
Financing receivable, payment terms	30 days
Commercial financing receivables \| Maximum
Financing receivables
Financing receivable, payment terms	90 days
Loan receivables \| Maximum
Financing receivables
Financing receivable, payment terms	7 years

Financing Receivables - Compone

Financing Receivables - Components of Financing Receivables (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Dec. 31, 2018
Components of the company's financing receivables
Financing receivables, gross	$ 19,898	$ 23,504
Unearned income	(903)	(1,083)
Residual value	586
Amortized Cost/Recorded Investment	19,582	22,421
Allowance for credit losses	(264)	(221)
Unguaranteed residual value		652
Guaranteed residual value		53
Total financing receivables, net	19,318	22,904
Current portion	11,967	14,192
Noncurrent portion	7,351	8,712
Financing receivables pledged as collateral for borrowings	758	1,062
Sold financing receivables	711
Financing receivables held for sale	0	0
Lease receivables
Components of the company's financing receivables
Financing receivables, gross	4,967	6,077
Unearned income	(393)	(509)
Residual value	586
Amortized Cost/Recorded Investment	5,160	5,567
Allowance for credit losses	(89)	(72)	$ (99)
Unguaranteed residual value		652
Guaranteed residual value		53
Total financing receivables, net	5,070	6,199
Current portion	2,087	2,334
Noncurrent portion	2,983	3,865
Sold financing receivables	417
Commercial financing receivables
Components of the company's financing receivables
Financing receivables, gross	2,393	3,836
Unearned income	(3)	(4)
Amortized Cost/Recorded Investment	2,389	3,831
Allowance for credit losses	(11)	(11)
Total financing receivables, net	2,379	3,820
Current portion	2,379	3,820
Loan receivables
Components of the company's financing receivables
Financing receivables, gross	12,539	13,592
Unearned income	(506)	(570)
Amortized Cost/Recorded Investment	12,033	13,022
Allowance for credit losses	(164)	(138)	$ (179)
Total financing receivables, net	11,869	12,884
Current portion	7,501	8,037
Noncurrent portion	4,368	$ 4,847
Sold financing receivables	$ 294

Financing Receivables - Collect

Financing Receivables - Collectively Evaluated Financing Receivables (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Maximum
Financing receivables
Reasonable and supportable economic forecast duration	2 years
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment
Financing receivables
Financing receivables - credit allowance, including related off-balance sheet commitments)		$ 64

Financing Receivables - By Port

Financing Receivables - By Portfolio Segment (Details) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020USD ($)item	Dec. 31, 2019USD ($)item
Financing receivables
Number of portfolio segments \| item	2
Number of classes of financing receivable \| item	3	3
Amortized cost/Recorded investment	$ 19,582	$ 22,421
Allowance for credit losses:
Allowance for credit losses, beginning balance	221
Allowance for credit losses, ending balance	264	221
Total Client Financing Receivables Portfolio Segment
Financing receivables
Amortized cost/Recorded investment	17,192	18,590
Recorded investment collectively evaluated for impairment		18,399
Recorded investment individually evaluated for impairment		191
Allowance for credit losses:
Allowance for credit losses, beginning balance	210	279
Write-offs	(21)	(63)
Recoveries	2	2
Additions/(releases)	34	(5)
Other	(14)	(2)
Allowance for credit losses, ending balance	253	210
Related allowance, collectively evaluated for impairment		39
Related allowance, individually evaluated for impairment		171
Total Client Financing Receivables Portfolio Segment \| Americas
Financing receivables
Amortized cost/Recorded investment	9,060	10,144
Recorded investment collectively evaluated for impairment		10,032
Recorded investment individually evaluated for impairment		112
Allowance for credit losses:
Allowance for credit losses, beginning balance	120	158
Write-offs	(17)	(42)
Recoveries	0	1
Additions/(releases)	28	5
Other	(13)	(1)
Allowance for credit losses, ending balance	140	120
Related allowance, collectively evaluated for impairment		25
Related allowance, individually evaluated for impairment		96
Total Client Financing Receivables Portfolio Segment \| EMEA
Financing receivables
Amortized cost/Recorded investment	4,932	5,087
Recorded investment collectively evaluated for impairment		5,040
Recorded investment individually evaluated for impairment		47
Allowance for credit losses:
Allowance for credit losses, beginning balance	54	65
Write-offs	(1)	(3)
Recoveries	0	0
Additions/(releases)	9	(7)
Other	0	0
Allowance for credit losses, ending balance	76	54
Related allowance, collectively evaluated for impairment		11
Related allowance, individually evaluated for impairment		43
Total Client Financing Receivables Portfolio Segment \| Asia Pacific
Financing receivables
Amortized cost/Recorded investment	3,201	3,359
Recorded investment collectively evaluated for impairment		3,326
Recorded investment individually evaluated for impairment		32
Allowance for credit losses:
Allowance for credit losses, beginning balance	36	56
Write-offs	(2)	(18)
Recoveries	2	1
Additions/(releases)	(2)	(3)
Other	(1)	(1)
Allowance for credit losses, ending balance	37	36
Related allowance, collectively evaluated for impairment		4
Related allowance, individually evaluated for impairment		32
Lease receivables
Financing receivables
Amortized cost/Recorded investment	5,160	5,567
Allowance for credit losses:
Allowance for credit losses, beginning balance	72	99
Write-offs		(16)
Additions/(releases)		(6)
Allowance for credit losses, ending balance	89	72
Lease receivables \| Americas
Financing receivables
Amortized cost/Recorded investment		3,419
Allowance for credit losses:
Allowance for credit losses, beginning balance	33	53
Allowance for credit losses, ending balance		33
Lease receivables \| EMEA
Financing receivables
Amortized cost/Recorded investment		1,186
Allowance for credit losses:
Allowance for credit losses, beginning balance	23	22
Allowance for credit losses, ending balance		23
Lease receivables \| Asia Pacific
Financing receivables
Amortized cost/Recorded investment		963
Allowance for credit losses:
Allowance for credit losses, beginning balance	16	24
Allowance for credit losses, ending balance		16
Loan receivables
Financing receivables
Amortized cost/Recorded investment	12,033	13,022
Allowance for credit losses:
Allowance for credit losses, beginning balance	138	179
Write-offs		(47)
Additions/(releases)		2
Allowance for credit losses, ending balance	164	138
Loan receivables \| Americas
Financing receivables
Amortized cost/Recorded investment		6,726
Allowance for credit losses:
Allowance for credit losses, beginning balance	88	105
Allowance for credit losses, ending balance		88
Loan receivables \| EMEA
Financing receivables
Amortized cost/Recorded investment		3,901
Allowance for credit losses:
Allowance for credit losses, beginning balance	31	43
Allowance for credit losses, ending balance		31
Loan receivables \| Asia Pacific
Financing receivables
Amortized cost/Recorded investment		2,395
Allowance for credit losses:
Allowance for credit losses, beginning balance	20	32
Allowance for credit losses, ending balance		20
Cumulative Effect, Period of Adoption, Adjustment \| Total Client Financing Receivables Portfolio Segment
Allowance for credit losses:
Allowance for credit losses, beginning balance	41
Allowance for credit losses, ending balance		41
Cumulative Effect, Period of Adoption, Adjustment \| Total Client Financing Receivables Portfolio Segment \| Americas
Allowance for credit losses:
Allowance for credit losses, beginning balance	21
Allowance for credit losses, ending balance		21
Cumulative Effect, Period of Adoption, Adjustment \| Total Client Financing Receivables Portfolio Segment \| EMEA
Allowance for credit losses:
Allowance for credit losses, beginning balance	15
Allowance for credit losses, ending balance		15
Cumulative Effect, Period of Adoption, Adjustment \| Total Client Financing Receivables Portfolio Segment \| Asia Pacific
Allowance for credit losses:
Allowance for credit losses, beginning balance	5
Allowance for credit losses, ending balance		5
Cumulative Effect, Period of Adoption, Adjusted Balance \| Total Client Financing Receivables Portfolio Segment
Allowance for credit losses:
Allowance for credit losses, beginning balance	252
Allowance for credit losses, ending balance		252
Cumulative Effect, Period of Adoption, Adjusted Balance \| Total Client Financing Receivables Portfolio Segment \| Americas
Allowance for credit losses:
Allowance for credit losses, beginning balance	142
Allowance for credit losses, ending balance		142
Cumulative Effect, Period of Adoption, Adjusted Balance \| Total Client Financing Receivables Portfolio Segment \| EMEA
Allowance for credit losses:
Allowance for credit losses, beginning balance	69
Allowance for credit losses, ending balance		69
Cumulative Effect, Period of Adoption, Adjusted Balance \| Total Client Financing Receivables Portfolio Segment \| Asia Pacific
Allowance for credit losses:
Allowance for credit losses, beginning balance	$ 41
Allowance for credit losses, ending balance		$ 41

Financing Receivables - Past Du

Financing Receivables - Past Due (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Past Due Financing Receivable
Amortized cost/Recorded investment	$ 19,582	$ 22,421
Total Client Financing Receivables Portfolio Segment
Past Due Financing Receivable
Amortized cost/Recorded investment	17,192	18,590
Amortized cost/Recorded Investment Not Accruing	229	235
Impaired financing receivables individually evaluated for impairment with related allowance		191
Impaired financing receivables, related allowance	171	171
Total Client Financing Receivables Portfolio Segment \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days	486	465
Amortized cost/Recorded Investment > 90 Days and Accruing	283	253
Billed Invoices > 90 Days and Accruing	38	29
Total Client Financing Receivables Portfolio Segment \| Americas
Past Due Financing Receivable
Amortized cost/Recorded investment	9,060	10,144
Amortized cost/Recorded Investment Not Accruing	111
Total Client Financing Receivables Portfolio Segment \| Americas \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days	323
Amortized cost/Recorded Investment > 90 Days and Accruing	231
Billed Invoices > 90 Days and Accruing	30
Total Client Financing Receivables Portfolio Segment \| EMEA
Past Due Financing Receivable
Amortized cost/Recorded investment	4,932	5,087
Amortized cost/Recorded Investment Not Accruing	89
Total Client Financing Receivables Portfolio Segment \| EMEA \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days	115
Amortized cost/Recorded Investment > 90 Days and Accruing	31
Billed Invoices > 90 Days and Accruing	5
Total Client Financing Receivables Portfolio Segment \| Asia Pacific
Past Due Financing Receivable
Amortized cost/Recorded investment	3,201	3,359
Amortized cost/Recorded Investment Not Accruing	29
Total Client Financing Receivables Portfolio Segment \| Asia Pacific \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days	48
Amortized cost/Recorded Investment > 90 Days and Accruing	20
Billed Invoices > 90 Days and Accruing	4
Lease receivables
Past Due Financing Receivable
Amortized cost/Recorded investment	5,160	5,567
Amortized cost/Recorded Investment Not Accruing		69
Lease receivables \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		234
Amortized cost/Recorded Investment > 90 Days and Accruing		168
Billed Invoices > 90 Days and Accruing		14
Lease receivables \| Americas
Past Due Financing Receivable
Amortized cost/Recorded investment		3,419
Amortized cost/Recorded Investment Not Accruing		41
Lease receivables \| Americas \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		187
Amortized cost/Recorded Investment > 90 Days and Accruing		147
Billed Invoices > 90 Days and Accruing		11
Lease receivables \| EMEA
Past Due Financing Receivable
Amortized cost/Recorded investment		1,186
Amortized cost/Recorded Investment Not Accruing		17
Lease receivables \| EMEA \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		28
Amortized cost/Recorded Investment > 90 Days and Accruing		13
Billed Invoices > 90 Days and Accruing		2
Lease receivables \| Asia Pacific
Past Due Financing Receivable
Amortized cost/Recorded investment		963
Amortized cost/Recorded Investment Not Accruing		11
Lease receivables \| Asia Pacific \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		19
Amortized cost/Recorded Investment > 90 Days and Accruing		7
Billed Invoices > 90 Days and Accruing		1
Loan receivables
Past Due Financing Receivable
Amortized cost/Recorded investment	$ 12,033	13,022
Amortized cost/Recorded Investment Not Accruing		166
Loan receivables \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		231
Amortized cost/Recorded Investment > 90 Days and Accruing		85
Billed Invoices > 90 Days and Accruing		15
Loan receivables \| Americas
Past Due Financing Receivable
Amortized cost/Recorded investment		6,726
Amortized cost/Recorded Investment Not Accruing		72
Loan receivables \| Americas \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		127
Amortized cost/Recorded Investment > 90 Days and Accruing		71
Billed Invoices > 90 Days and Accruing		11
Loan receivables \| EMEA
Past Due Financing Receivable
Amortized cost/Recorded investment		3,901
Amortized cost/Recorded Investment Not Accruing		72
Loan receivables \| EMEA \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		77
Amortized cost/Recorded Investment > 90 Days and Accruing		8
Billed Invoices > 90 Days and Accruing		3
Loan receivables \| Asia Pacific
Past Due Financing Receivable
Amortized cost/Recorded investment		2,395
Amortized cost/Recorded Investment Not Accruing		21
Loan receivables \| Asia Pacific \| Total Past Due > 90 days
Past Due Financing Receivable
Amortized cost/Recorded Investment > 90 Days		26
Amortized cost/Recorded Investment > 90 Days and Accruing		6
Billed Invoices > 90 Days and Accruing		$ 2

Financing Receivables - Credit

Financing Receivables - Credit Quality Year of Origination (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment	$ 19,582	$ 22,421
Americas \| Aaa - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
2020	1,556
2019	2,076
2018	1,173
2017	582
2016	144
2015 and prior	57
Amortized Cost/Recorded Investment	5,588
Americas \| Ba1 - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
2020	1,185
2019	1,187
2018	608
2017	257
2016	95
2015 and prior	140
Amortized Cost/Recorded Investment	3,472
EMEA \| Aaa - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
2020	925
2019	922
2018	403
2017	107
2016	52
2015 and prior	37
Amortized Cost/Recorded Investment	2,444
EMEA \| Ba1 - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
2020	1,062
2019	836
2018	328
2017	170
2016	65
2015 and prior	27
Amortized Cost/Recorded Investment	2,487
Asia Pacific \| Aaa - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
2020	548
2019	719
2018	498
2017	266
2016	176
2015 and prior	80
Amortized Cost/Recorded Investment	2,287
Asia Pacific \| Ba1 - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
2020	273
2019	271
2018	221
2017	77
2016	48
2015 and prior	24
Amortized Cost/Recorded Investment	$ 914

Financing Receivables - Credi_2

Financing Receivables - Credit Quality Indicators (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Troubled debt restructurings of financing receivables
Lease receivables \| Americas
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		3,385
Lease receivables \| Americas \| Aaa - Aa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		465
Lease receivables \| Americas \| A1 - A3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		750
Lease receivables \| Americas \| Baa1 - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		955
Lease receivables \| Americas \| Ba1 - Ba2
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		746
Lease receivables \| Americas \| Ba3 - B1
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		215
Lease receivables \| Americas \| B2 - B3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		242
Lease receivables \| Americas \| Caa - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		13
Lease receivables \| EMEA
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		1,162
Lease receivables \| EMEA \| Aaa - Aa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		54
Lease receivables \| EMEA \| A1 - A3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		181
Lease receivables \| EMEA \| Baa1 - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		409
Lease receivables \| EMEA \| Ba1 - Ba2
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		326
Lease receivables \| EMEA \| Ba3 - B1
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		140
Lease receivables \| EMEA \| B2 - B3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		50
Lease receivables \| EMEA \| Caa - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		2
Lease receivables \| Asia Pacific
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		947
Lease receivables \| Asia Pacific \| Aaa - Aa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		43
Lease receivables \| Asia Pacific \| A1 - A3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		454
Lease receivables \| Asia Pacific \| Baa1 - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		147
Lease receivables \| Asia Pacific \| Ba1 - Ba2
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		154
Lease receivables \| Asia Pacific \| Ba3 - B1
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		101
Lease receivables \| Asia Pacific \| B2 - B3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		47
Lease receivables \| Asia Pacific \| Caa - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		2
Loan receivables \| Americas
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		6,638
Loan receivables \| Americas \| Aaa - Aa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		1,028
Loan receivables \| Americas \| A1 - A3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		1,186
Loan receivables \| Americas \| Baa1 - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		1,882
Loan receivables \| Americas \| Ba1 - Ba2
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		1,513
Loan receivables \| Americas \| Ba3 - B1
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		471
Loan receivables \| Americas \| B2 - B3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		522
Loan receivables \| Americas \| Caa - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		36
Loan receivables \| EMEA
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		3,871
Loan receivables \| EMEA \| Aaa - Aa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		193
Loan receivables \| EMEA \| A1 - A3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		395
Loan receivables \| EMEA \| Baa1 - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		1,527
Loan receivables \| EMEA \| Ba1 - Ba2
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		921
Loan receivables \| EMEA \| Ba3 - B1
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		564
Loan receivables \| EMEA \| B2 - B3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		253
Loan receivables \| EMEA \| Caa - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		18
Loan receivables \| Asia Pacific
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		2,376
Loan receivables \| Asia Pacific \| Aaa - Aa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		189
Loan receivables \| Asia Pacific \| A1 - A3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		892
Loan receivables \| Asia Pacific \| Baa1 - Baa3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		619
Loan receivables \| Asia Pacific \| Ba1 - Ba2
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		388
Loan receivables \| Asia Pacific \| Ba3 - B1
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		205
Loan receivables \| Asia Pacific \| B2 - B3
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		72
Loan receivables \| Asia Pacific \| Caa - D
Amortized cost/recorded investment for each class of receivables, by credit quality indicator
Amortized Cost/Recorded Investment		$ 10

Leases - Lease Amounts Included

Leases - Lease Amounts Included in Consolidated Income Statement (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Lease income - sales-type and direct financing leases
Sales-type lease selling price	$ 368	$ 179	$ 579	$ 328
Less: Carrying value of underlying assets	117	74	194	129
Gross profit	251	105	385	199
Interest income on lease receivables	65	73	139	151
Total sales-type and direct financing lease income	316	178	524	350
Lease income - operating leases	68	82	139	172
Variable lease income	27	9	58	27
Total lease income	$ 411	$ 269	$ 721	$ 548

Intangible Assets Including G_3

Intangible Assets Including Goodwill - Intangible Assets by Class (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Intangible asset balances by major asset class
Gross Carrying Amount	$ 18,656	$ 19,287
Accumulated Amortization	(4,387)	(4,052)
Net Carrying Amount	14,270	15,235
Amount of foreign currency translation decrease	(6)	(42)
Capitalized software
Intangible asset balances by major asset class
Gross Carrying Amount	1,759	1,749
Accumulated Amortization	(776)	(743)
Net Carrying Amount	983	1,006
Client relationships
Intangible asset balances by major asset class
Gross Carrying Amount	8,665	8,921
Accumulated Amortization	(1,665)	(1,433)
Net Carrying Amount	7,000	7,488
Completed technology
Intangible asset balances by major asset class
Gross Carrying Amount	5,964	6,261
Accumulated Amortization	(1,466)	(1,400)
Net Carrying Amount	4,498	4,861
Patents/trademarks
Intangible asset balances by major asset class
Gross Carrying Amount	2,213	2,301
Accumulated Amortization	(445)	(445)
Net Carrying Amount	1,768	1,856
Other intangible assets
Intangible asset balances by major asset class
Gross Carrying Amount	56	56
Accumulated Amortization	(35)	(31)
Net Carrying Amount	$ 20	$ 24

Intangible Assets Including G_4

Intangible Assets Including Goodwill - Intangible Assets Activity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Intangible assets
Intangible assets, increase (decrease)			$ (965)
Intangible asset amortization expense	$ 623	$ 307	1,245	$ 610
Retirement of fully amortized intangible assets			$ 913

Intangible Assets Including G_5

Intangible Assets Including Goodwill - Future Amortization (Details) $ in Millions	Jun. 30, 2020USD ($)
Future amortization expense, by year
Remainder of 2020	$ 1,193
2021	2,193
2022	1,901
2023	1,407
2024	1,323
Thereafter	6,251
Capitalized software
Future amortization expense, by year
Remainder of 2020	288
2021	445
2022	215
2023	35
2024	0
Acquired intangibles
Future amortization expense, by year
Remainder of 2020	905
2021	1,748
2022	1,686
2023	1,373
2024	1,323
Thereafter	$ 6,251

Intangible Assets Including G_6

Intangible Assets Including Goodwill - Goodwill by Segment (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Changes in Goodwill Balances
Beginning Balance	$ 58,222	$ 36,265
Goodwill Additions	11	23,102
Purchase Price Adjustments		24
Divestitures		(1,257)
Foreign Currency Translation and Other Adjustments	(260)	87
Ending Balance	57,833	58,222
Goodwill impairment losses	0	0
Goodwill accumulated impairment losses	0	0
Red Hat, Inc.
Changes in Goodwill Balances
Purchase Price Adjustments	(139)
Ending Balance	23,000
Cloud & Cognitive Software \| Red Hat, Inc.
Changes in Goodwill Balances
Ending Balance	18,400
Global Business Services \| Red Hat, Inc.
Changes in Goodwill Balances
Ending Balance	1,100
Global Technology Services \| Red Hat, Inc.
Changes in Goodwill Balances
Ending Balance	3,100
Systems \| Red Hat, Inc.
Changes in Goodwill Balances
Ending Balance	400
Business Segments \| Cloud & Cognitive Software
Changes in Goodwill Balances
Beginning Balance	43,037	24,463
Goodwill Additions	11	18,399
Purchase Price Adjustments		133
Foreign Currency Translation and Other Adjustments	(147)	41
Ending Balance	42,762	43,037
Business Segments \| Cloud & Cognitive Software \| Red Hat, Inc.
Changes in Goodwill Balances
Purchase Price Adjustments	(139)
Business Segments \| Global Business Services
Changes in Goodwill Balances
Beginning Balance	5,775	4,711
Goodwill Additions		1,059
Purchase Price Adjustments		1
Divestitures		(1)
Foreign Currency Translation and Other Adjustments	(45)	5
Ending Balance	5,730	5,775
Business Segments \| Global Technology Services
Changes in Goodwill Balances
Beginning Balance	7,141	3,988
Goodwill Additions		3,119
Foreign Currency Translation and Other Adjustments	(61)	34
Ending Balance	7,080	7,141
Business Segments \| Systems
Changes in Goodwill Balances
Beginning Balance	2,270	1,847
Goodwill Additions		525
Purchase Price Adjustments		(110)
Foreign Currency Translation and Other Adjustments	(8)	7
Ending Balance	$ 2,261	2,270
Other \| Divested businesses
Changes in Goodwill Balances
Beginning Balance		1,256
Divestitures		$ (1,256)

Borrowings - Short-Term Debt (D

Borrowings - Short-Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Short-term debt disclosures
Commercial paper	$ 115	$ 304
Short-term loans	730	971
Long-term debt - current maturities	8,444	7,522
Short-term Debt, Total	$ 9,289	$ 8,797
Commercial paper
Short-term debt disclosures
Weighted-average interest rates for short-term debt (as a percent)	1.40%	1.60%
Short-term loans
Short-term debt disclosures
Weighted-average interest rates for short-term debt (as a percent)	5.00%	6.10%

Borrowings - Long-Term Debt, Co

Borrowings - Long-Term Debt, Components (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Borrowings
Long-term debt excluding finance lease obligations	$ 64,203	$ 62,003
Finance lease obligations	268	204
Long-term debt, gross	64,470	62,207
Less: net unamortized discount	892	881
Less: net unamortized debt issuance cost	165	142
Add: fair value adjustment	480	440
Total	63,893	61,624
Less: current maturities	8,444	7,522
Total long-term debt (excluding current portion)	$ 55,449	54,102
Finance lease obligations, interest rate	1.80%
U.S. dollars
Borrowings
Long-term debt, gross	$ 42,804	44,594
Euro
Borrowings
Long-term debt, gross	$ 18,545	14,306
Debt instrument, weighted-average interest rate (as a percent)	1.10%
Pound sterling
Borrowings
Long-term debt, gross	$ 1,301	1,390
Debt instrument, weighted-average interest rate (as a percent)	2.70%
Japanese yen
Borrowings
Long-term debt, gross	$ 1,349	1,339
Debt instrument, weighted-average interest rate (as a percent)	0.30%
Other
Borrowings
Long-term debt, gross	$ 203	375
Debt instrument, weighted-average interest rate (as a percent)	3.10%
Maturing 2020 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 1,513	4,326
Debt instrument, weighted-average interest rate (as a percent)	2.20%
Maturing 2021 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 5,536	8,498
Debt instrument, weighted-average interest rate (as a percent)	1.60%
Maturing 2022 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 6,246	6,289
Debt instrument, weighted-average interest rate (as a percent)	2.60%
Maturing 2023 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 2,403	2,388
Debt instrument, weighted-average interest rate (as a percent)	3.30%
Maturing 2024 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 5,041	5,045
Debt instrument, weighted-average interest rate (as a percent)	3.30%
Maturing 2025 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 654	636
Debt instrument, weighted-average interest rate (as a percent)	6.60%
Maturing 2026 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 4,350	4,350
Debt instrument, weighted-average interest rate (as a percent)	3.30%
Maturing 2027 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 2,219	969
Debt instrument, weighted-average interest rate (as a percent)	3.00%
Maturing 2028 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 313	313
Debt instrument, weighted-average interest rate (as a percent)	6.50%
Maturing 2029 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 3,250	3,250
Debt instrument, weighted-average interest rate (as a percent)	3.50%
Maturing 2030 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 1,350
Debt instrument, weighted-average interest rate (as a percent)	2.00%
Maturing 2032 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 600	600
Debt instrument, weighted-average interest rate (as a percent)	5.90%
Maturing 2038 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 83	83
Debt instrument, weighted-average interest rate (as a percent)	8.00%
Maturing 2039 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 2,745	2,745
Debt instrument, weighted-average interest rate (as a percent)	4.50%
Maturing 2040 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 650
Debt instrument, weighted-average interest rate (as a percent)	2.90%
Maturing 2042 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 1,107	1,107
Debt instrument, weighted-average interest rate (as a percent)	4.00%
Maturing 2045 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 27	27
Debt instrument, weighted-average interest rate (as a percent)	7.00%
Maturing 2046 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 650	650
Debt instrument, weighted-average interest rate (as a percent)	4.70%
Maturing 2049 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 3,000	3,000
Debt instrument, weighted-average interest rate (as a percent)	4.30%
Maturing 2050 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 750
Debt instrument, weighted-average interest rate (as a percent)	3.00%
Maturing 2096 \| U.S. dollars
Borrowings
Long-term debt, gross	$ 316	$ 316
Debt instrument, weighted-average interest rate (as a percent)	7.10%

Borrowings - Long-Term Debt, _2

Borrowings - Long-Term Debt, Covenants (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020USD ($)
Borrowings
Limit based on net tangible assets	10.00%
Credit Facilities
Borrowings
Minimum net interest expense ratio	2.20
Default provision on credit facility	$ 500

Borrowings - Long-Term Debt, De

Borrowings - Long-Term Debt, Debt Issued (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Long-term Debt Instrument
Notes Issued
Aggregate amount of debt issued			$ 20,000
U.S dollar. fixed and/or floating rate notes
Notes Issued
Aggregate amount of debt issued		$ 4,000	20,000
Euro fixed-rate notes
Notes Issued
Aggregate amount of debt issued		4,100	$ 5,700
Fixed rate debt due in 2021
Notes Issued
Outstanding debt redeemed		$ 2,900
Loss upon redemption on notes	$ (49)

Borrowings - Pre-Swap Obligatio

Borrowings - Pre-Swap Obligations (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Pre-swap annual contractual obligations of long-term debt outstanding
Remainder of 2020	$ 4,366
2021	6,937
2022	7,194
2023	5,417
2024	6,324
Thereafter	34,232
Total	$ 64,470	$ 62,207

Borrowings - Interest on Debt (

Borrowings - Interest on Debt (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Interest on Debt
Interest capitalized	$ 5	$ 3
Total interest paid and accrued	891	904
Cost of financing
Interest on Debt
Interest paid	237	343
Interest expense
Interest on Debt
Interest paid	$ 649	$ 558

Borrowings - Lines of Credit (D

Borrowings - Lines of Credit (Details) - USD ($) $ in Millions	Jul. 02, 2020	Jun. 30, 2020
Five-Year Credit Agreement \| Expected
Lines of Credit
Amount of credit facility	$ 10,250
Credit facility term	5 years
Option to extend maturity period	2 years
364-Day Credit Agreement, 2019
Lines of Credit
Amount of credit facility		$ 2,500
Credit facility term		364 days
Three-Year Credit Agreement \| Expected
Lines of Credit
Amount of credit facility	$ 2,500
Credit facility term	3 years
Credit Agreement 364 Days 2020 \| Expected
Lines of Credit
Amount of credit facility	$ 2,500
Credit facility term	364 days
Credit Facilities
Lines of Credit
Borrowings outstanding		$ 0

Commitments - Extensions of Cre

Commitments - Extensions of Credit (Details) - USD ($) $ in Billions	Jun. 30, 2020	Dec. 31, 2019
Extended lines of credit
Commitments, guarantees:
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients	$ 1.9	$ 1.8
Financing for client purchase agreements
Commitments, guarantees:
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients	$ 5.7	$ 6.3

Commitments - Standard Warranty

Commitments - Standard Warranty Liability (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Movement in standard warranty liability
Beginning Balance	$ 113	$ 118
Current period accruals	43	45
Accrual adjustments to reflect actual experience	(14)	(1)
Charges incurred	(49)	(59)
Ending Balance	$ 93	$ 103

Commitments - Extended Warranty

Commitments - Extended Warranty Liability (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Movement in deferred income
Amortization of deferred revenue	$ (4,500)			$ (6,500)
Current portion	12,469	$ 12,469		12,026
Noncurrent portion	3,787	3,787		3,851
Extended Warranty
Movement in deferred income
Beginning Balance		477	$ 533	533
Revenue deferred for new extended warranty contracts		93	81
Amortization of deferred revenue		(115)	(128)
Other		(9)	0
Ending Balance	445	445	486	$ 477
Current portion	216	216	225
Noncurrent portion	$ 228	$ 228	$ 260

Contingencies (Details)

Contingencies (Details) $ in Millions	1 Months Ended	6 Months Ended
Contingencies (Details) $ in Millions	May 31, 2015defendant	Jun. 30, 2020USD ($)country	Oct. 30, 2017claim
Brazil Tax Matters
Loss Contingencies
Damages sought, value \| $		$ 700
SCO v. IBM
Loss Contingencies
Number of remaining claims \| claim			1
Litigation Case In United States District Court regarding divesting Microelectronics business, alleging violations of the Employee Retirement Income Security Act
Loss Contingencies
Number of officers or executives named as defendants \| defendant	3
Minimum
Loss Contingencies
Clients' presence in number of countries \| country		175

Equity Activity - Reclassificat

Equity Activity - Reclassifications and Taxes (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019		Jun. 30, 2020	Jun. 30, 2019
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	$ 9,423	$ 10,151		$ 19,071	$ 20,290
SG&A expense	5,248	5,456		11,203	10,147
Other (income) and expense	179	(747)		361	(820)
Interest expense	323	348		649	558
Provision for/(benefit from) income taxes	209	269		(1,017)	558
Net (income) loss	(1,361)	(2,498)		(2,536)	(4,089)
Other comprehensive income/(loss)	527	340		(160)	649
Services
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	7,520	8,181	[1]	15,363	16,453	[1]
Sales
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	1,739	1,741	[1]	3,363	3,344	[1]
Financing
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	165	228		345	492
Accumulated Other Comprehensive Income/(Loss)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Net of Tax Amount				(1,025)	29
Reclassification/amortization, Net of Tax Amount				866	620
Other comprehensive income/(loss), Before Tax Amount	548	405		121	779
Other comprehensive income/(loss), Tax (Expense)/Benefit	(21)	(64)		(281)	(131)
Other comprehensive income/(loss)	527	340		(160)	649
Foreign Currency Translation Adjustments
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Net of Tax Amount				(902)	214
Other comprehensive income/(loss), Before Tax Amount	4	5		(915)	176
Other comprehensive income/(loss), Tax (Expense)/Benefit	135	37		13	38
Other comprehensive income/(loss)	139	42		(902)	214
Net Unrealized Gains/(Losses) on Available-For-Sale Securities
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	1	(2)		1	(3)
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	0	0		0	1
Unrealized gains/(losses) arising during the period, Net of Tax Amount	1	(1)		1	(2)
Other comprehensive income/(loss), Before Tax Amount	1	(2)		1	(3)
Other comprehensive income/(loss), Tax (Expense)/Benefit	0	0		0	1
Other comprehensive income/(loss)	1	(1)		1	(2)
Net Unrealized Gains/(Losses) on Cash Flow Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	(36)	(6)		(216)	(359)
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	9	2		55	87
Unrealized gains/(losses) arising during the period, Net of Tax Amount	(26)	(4)		(162)	(272)
Reclassification/amortization, Net of Tax Amount				25	(51)
Other comprehensive income/(loss), Before Tax Amount	(94)	(175)		(184)	(429)
Other comprehensive income/(loss), Tax (Expense)/Benefit	25	45		47	106
Other comprehensive income/(loss)	(70)	(129)		(137)	(323)
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications
Reclassifications and Taxes Related to Items of Other Comprehensive Income
SG&A expense	(7)	(12)		(17)	(34)
Other (income) and expense	(70)	(202)		19	(115)
Interest expense	19	52		41	86
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Services
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	1	(20)		(9)	(29)
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Sales
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	(9)	(11)		(18)	(30)
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Financing
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	7	25		15	53
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Cost of services
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	0	5		2	8
Net (income) loss	1	(15)		(6)	(22)
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Cost of sales
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	3	3		5	8
Net (income) loss	(7)	(8)		(13)	(21)
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Cost of financing
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	(2)	(6)		(4)	(13)
Net (income) loss	5	18		11	40
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| SG&A expense
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	2	3		4	9
Net (income) loss	(5)	(9)		(13)	(25)
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Other (income) and expense
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	18	51		(5)	29
Net (income) loss	(52)	(151)		15	(86)
Net Unrealized Gains/(Losses) on Cash Flow Hedges \| Reclassifications \| Interest expense
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	(5)	(13)		(10)	(22)
Net (income) loss	15	39		31	64
Net Change Retirement-Related Benefit Plans
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Net of Tax Amount				38	89
Reclassification/amortization, Net of Tax Amount				841	671
Other comprehensive income/(loss), Before Tax Amount	637	576		1,219	1,035
Other comprehensive income/(loss), Tax (Expense)/Benefit	(180)	(147)		(341)	(275)
Other comprehensive income/(loss)	457	430		879	760
Retirement-Related Benefit Plans, Prior Service Costs/(Credits)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount				(4)
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	0			1
Unrealized gains/(losses) arising during the period, Net of Tax Amount	0			(3)
Reclassification/amortization, Before Tax Amount	0	(3)		1	(6)
Reclassification/amortization, Tax (Expense)/Benefit	1	0		1	1
Reclassification/amortization, Net of Tax Amount	1	(3)		2	(5)
Retirement-Related Benefit Plans, Net Gains/(Losses)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	57	116		65	113
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	(22)	(25)		(24)	(24)
Unrealized gains/(losses) arising during the period, Net of Tax Amount	35	92		41	89
Reclassification/amortization, Before Tax Amount	566	460		1,136	924
Reclassification/amortization, Tax (Expense)/Benefit	(155)	(123)		(312)	(252)
Reclassification/amortization, Net of Tax Amount	411	337		824	671
Retirement-Related Benefit Plans, Curtailments and Settlements
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	13	3		21	4
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	(4)	0		(6)	0
Unrealized gains/(losses) arising during the period, Net of Tax Amount	$ 9	$ 3		$ 15	$ 4

[1]	Reclassified to conform to current period presentation. Refer to note 1, “Basis of Presentation,” for additional information.

Equity Activity - AOCI Rollforw

Equity Activity - AOCI Rollforward (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	$ 20,128	$ 16,607	$ 20,985	$ 16,929
Other comprehensive income/(loss)	527	340	(160)	649
Balance at the End of the Period	20,688	17,776	20,688	17,776
Accumulated Other Comprehensive Income/(Loss)
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	(29,283)	(29,182)	(28,597)	(29,490)
Other comprehensive income before reclassifications			(1,025)	29
Amount reclassified from accumulated other comprehensive income			866	620
Other comprehensive income/(loss)	527	340	(160)	649
Balance at the End of the Period	(28,757)	(28,841)	(28,757)	(28,841)
Net Unrealized Gains/(Losses) on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period			(179)	284
Other comprehensive income before reclassifications	(26)	(4)	(162)	(272)
Amount reclassified from accumulated other comprehensive income			25	(51)
Other comprehensive income/(loss)	(70)	(129)	(137)	(323)
Balance at the End of the Period	(316)	(39)	(316)	(39)
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period			(3,700)	(3,690)
Other comprehensive income before reclassifications			(902)	214
Other comprehensive income/(loss)	139	42	(902)	214
Balance at the End of the Period	(4,602)	(3,477)	(4,602)	(3,477)
Net Change Retirement-Related Benefit Plans
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period			(24,718)	(26,083)
Other comprehensive income before reclassifications			38	89
Amount reclassified from accumulated other comprehensive income			841	671
Other comprehensive income/(loss)	457	430	879	760
Balance at the End of the Period	(23,839)	(25,323)	(23,839)	(25,323)
Net Unrealized Gains/(Losses) on Available-For-Sale Securities
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period			0	0
Other comprehensive income before reclassifications	1	(1)	1	(2)
Other comprehensive income/(loss)	1	(1)	1	(2)
Balance at the End of the Period	$ 1	$ (2)	$ 1	$ (2)

Derivative Financial Instrume_3

Derivative Financial Instruments - Offsetting (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Derivative Financial Instruments
Potential reduction in net position of total derivative assets	$ 220	$ 194
Potential reduction in net position of total derivative liabilities	220	194
Cash collateral rehypothecated	0	0
Other receivables
Derivative Financial Instruments
Right to reclaim cash collateral	0	26
Accounts payable
Derivative Financial Instruments
Obligation to return cash collateral	$ 2	$ 0

Derivative Financial Instrume_4

Derivative Financial Instruments - Hedging Programs (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Instruments in net investment hedges
Derivative Financial Instruments
Notional amount	$ 8,800	$ 7,900
Average remaining maturity	3 months 18 days	1 month 6 days
Interest rate swaps \| Derivative instruments in fair value hedges
Derivative Financial Instruments
Notional amount	$ 3,000	$ 3,000
Average remaining maturity	1 year 8 months 12 days	2 years 2 months 12 days
Interest rate swaps \| Derivative instruments in cash flow hedges
Derivative Financial Instruments
Notional amount	$ 0	$ 0
Foreign exchange contracts \| Not designated as hedging instruments - economic hedges
Derivative Financial Instruments
Notional amount	$ 4,300	7,100
Foreign exchange contracts \| Not designated as hedging instruments - economic hedges \| Maximum
Derivative Financial Instruments
Term of contract	1 year
Foreign exchange contracts \| Instruments in net investment hedges
Derivative Financial Instruments
Increase (decrease) in derivative	$ 9,800
Notional amount	$ 17,100	7,300
Foreign exchange forward contracts \| Derivative instruments in cash flow hedges
Derivative Financial Instruments
Maximum length of time hedged	4 years
Notional amount	$ 9,400	$ 9,700
Average remaining maturity	8 months 12 days	9 months 18 days
Net gains (losses) before taxes in other comprehensive income/(loss), cash flow hedges	$ 58	$ 145
Gains (losses) expected to be reclassified to net income within the next 12 months	$ 28
Cross-currency swaps \| Derivative instruments in cash flow hedges
Derivative Financial Instruments
Maximum length of time hedged	8 years
Increase (decrease) in derivative	$ (5,700)
Notional amount	2,400	8,200
Net gains (losses) before taxes in other comprehensive income/(loss), cash flow hedges	(291)	$ (185)
Gains (losses) expected to be reclassified to net income within the next 12 months	$ (25)
Forward-starting interest rate swaps \| Derivative instruments in cash flow hedges
Derivative Financial Instruments
Amount of terminated derivative			$ 5,500
Number of derivative instruments outstanding	0	0
Net gains (losses) before taxes in other comprehensive income/(loss), cash flow hedges	$ (183)	$ (192)
Gains (losses) expected to be reclassified to net income within the next 12 months	(18)
Equity contracts hedging employee compensation obligations \| Not designated as hedging instruments - economic hedges
Derivative Financial Instruments
Notional amount	$ 1,200	$ 1,300
Long-term Debt Instrument
Derivative Financial Instruments
Aggregate amount of debt issued			$ 20,000

Derivative Financial Instrume_5

Derivative Financial Instruments - Cumulative Basis Adjustments for Fair Value Hedges (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Short-term debt
Amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges
Carrying amount of the hedged item	$ (1,313)
Cumulative hedging adjustments included in the carrying amount-assets/(liabilities)	(14)
Long-term debt
Amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges
Carrying amount of the hedged item	(2,138)	$ (3,411)
Cumulative hedging adjustments included in the carrying amount-assets/(liabilities)	(466)	(440)
Hedging adjustments on discontinued hedging relationships	$ (378)	$ (404)

Derivative Financial Instrume_6

Derivative Financial Instruments - Effect of Hedge Activity on Income and Expense (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019		Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss)
Cost	$ 9,423	$ 10,151		$ 19,071	$ 20,290
SG&A expense	5,248	5,456		11,203	10,147
Other (income) and expense	179	(747)		361	(820)
Interest expense	323	348		649	558
Cost of services
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	(1)	20		9	29
Cost of sales
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	9	11		18	30
Cost of financing
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	2	(18)		6	(36)
SG&A expense
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	157	38		(34)	179
Other (income) and expense
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	92	271		(9)	202
Interest expense
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	7	(39)		16	(59)
Services
Derivative Instruments, Gain (Loss)
Cost	7,520	8,181	[1]	15,363	16,453	[1]
Sales
Derivative Instruments, Gain (Loss)
Cost	1,739	1,741	[1]	3,363	3,344	[1]
Financing
Derivative Instruments, Gain (Loss)
Cost	$ 165	$ 228		$ 345	$ 492

[1]	Reclassified to conform to current period presentation. Refer to note 1, “Basis of Presentation,” for additional information.

Derivative Financial Instrume_7

Derivative Financial Instruments - Gains and Losses (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	$ 183	$ 165	$ 37	$ 377
Gain (loss) recognized in earnings attributable to risk being hedged	11	(64)	(39)	(132)
Cash flow hedges and net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	(571)	(154)	(266)	(487)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	59	168	(32)	70
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	14	13	41	30
Interest rate contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI		3		(168)
Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	(36)	(10)	(216)	(191)
Foreign exchange contracts \| Instruments in net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	(535)	(148)	(50)	(128)
Cost of services \| Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(1)	20	9	29
Cost of sales \| Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	9	11	18	30
Cost of financing \| Interest rate contracts \| Derivative instruments in fair value hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	3	23	21	55
Gain (loss) recognized in earnings attributable to risk being hedged	3	(20)	(11)	(50)
Cost of financing \| Interest rate contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(1)	(1)	(2)	(1)
Cost of financing \| Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(6)	(24)	(13)	(52)
Cost of financing \| Foreign exchange contracts \| Instruments in net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	4	4	11	12
SG&A expense \| Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	7	12	17	34
SG&A expense \| Equity contracts \| Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	150	26	(51)	145
Other (income) and expense \| Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	70	202	(19)	115
Other (income) and expense \| Foreign exchange contracts \| Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	22	69	10	87
Interest expense \| Interest rate contracts \| Derivative instruments in fair value hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	8	48	56	90
Gain (loss) recognized in earnings attributable to risk being hedged	8	(43)	(29)	(82)
Interest expense \| Interest rate contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(3)	(2)	(6)	(1)
Interest expense \| Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(16)	(51)	(35)	(85)
Interest expense \| Foreign exchange contracts \| Instruments in net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	$ 10	$ 9	$ 30	$ 19

Derivative Financial Instrume_8

Derivative Financial Instruments - Other Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Financial Instruments
Gains (losses) excluded from the assessment of hedge effectiveness for fair value hedges
Gains (losses) excluded from the assessment of hedge effectiveness for cash flow hedges
Gains (losses) associated with underlying exposure that did not occur or was not expected to occur for cash flow hedges

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Millions	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	$ 247	$ 135	$ 436	$ 248
Income tax benefits	(52)	(29)	(96)	(54)
Net stock-based compensation cost	196	106	340	194
Pre-tax stock-based compensation cost increase (decrease)	112		188
Unrecognized compensation cost related to non-vested awards	1,600		$ 1,600
Unrecognized compensation cost related to non-vested awards, weighted average period of recognition			2 years 7 months 6 days
Restricted Stock Units
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost increase (decrease)	45		$ 63
Performance Share Units
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost increase (decrease)	5		(2)
Red Hat, Inc.
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost increase (decrease) related to conversion of stock-based awards of acquired entities	62		127
Cost
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	40	22	67	42
SG&A expense
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	155	93	272	167
Research, development and engineering
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	$ 52	$ 21	$ 97	$ 39

Retirement-Related Benefits - A

Retirement-Related Benefits - All Retirement Plans Cost (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Retirement-Related Benefits
Defined benefit and contribution pension plans - cost	$ 596	$ 441	$ 1,179	$ 878
Nonpension postretirement plans - cost	50	53	102	107
Total	$ 645	$ 494	$ 1,281	$ 985
Year-to-year percent change, defined benefit and contribution pension plans cost (as a percent)	34.90%		34.30%
Year-to-year percent change, nonpension postretirement plans cost (as a percent)	(5.60%)		(4.80%)
Year-to-year percent change, total (as a percent)	30.60%		30.00%

Retirement-Related Benefits - C

Retirement-Related Benefits - Cost of Pension Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Cost/(Income) of Pension Plans
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	$ 596	$ 441	$ 1,179	$ 878
U.S. \| Pension Plans
Cost/(Income) of Pension Plans
Interest cost	$ 375	$ 469	$ 750	$ 941
Interest cost - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Expected return on plan assets	$ (542)	$ (650)	$ (1,084)	$ (1,300)
Expected return on plan assets - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Amortization of prior service costs/(credits)	$ 4	$ 4	$ 8	$ 8
Amortization of prior service costs/(credits) - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Recognized actuarial losses	$ 207	$ 139	$ 415	$ 279
Recognized actuarial losses - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Curtailments and settlements - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Other costs - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 44	$ (37)	$ 89	$ (71)
Cost of defined contribution plans	154	140	309	289
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	198	103	398	218
Non-U.S. \| Pension Plans
Cost/(Income) of Pension Plans
Service cost	95	93	190	185
Interest cost	$ 137	$ 206	$ 266	$ 413
Interest cost - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Expected return on plan assets	$ (311)	$ (396)	$ (620)	$ (795)
Expected return on plan assets - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Amortization of prior service costs/(credits)	$ (5)	$ (7)	$ (9)	$ (13)
Amortization of prior service costs/(credits) - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Recognized actuarial losses	$ 340	$ 312	$ 682	$ 626
Recognized actuarial losses - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Curtailments and settlements	$ 13	$ 3	$ 21	$ 4
Curtailments and settlements - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Multi-employer plans	$ 7	$ 8	$ 14	$ 17
Other costs/(credits)	$ 9	$ 6	$ 14	$ 11
Other costs - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 284	$ 225	$ 559	$ 449
Cost of defined contribution plans	113	114	223	212
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	$ 397	$ 339	$ 782	$ 661

Retirement-Related Benefits - N

Retirement-Related Benefits - Nonpension Postretirement Cost (Details) - Nonpension Postretirement Benefit Plans - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
U.S.
Post retirement plan cost
Service cost	$ 2	$ 3	$ 4	$ 5
Interest cost	$ 26	$ 36	$ 51	$ 73
Interest cost - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Expected return on plan assets - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Amortization of prior service costs/(credits)	$ 1	$ (1)	$ 2	$ (1)
Amortization of prior service costs/(credits) - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Recognized actuarial losses	$ 7	$ 0	$ 15	$ 0
Recognized actuarial losses - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Curtailments and settlements - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 36	$ 38	$ 72	$ 77
Non-U.S.
Post retirement plan cost
Service cost	1	1	3	3
Interest cost	$ 8	$ 12	$ 18	$ 25
Interest cost - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Expected return on plan assets	$ (1)	$ (1)	$ (2)	$ (3)
Expected return on plan assets - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Amortization of prior service costs/(credits)	$ 0	$ 0	$ 0	$ 0
Amortization of prior service costs/(credits) - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Recognized actuarial losses	$ 5	$ 3	$ 11	$ 5
Recognized actuarial losses - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Curtailments and settlements			$ 0	$ 0
Curtailments and settlements - income statement location	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense	ibm:OtherIncomeAndExpense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 14	$ 15	$ 29	$ 30

Retirement-Related Benefits -_2

Retirement-Related Benefits - Contributions (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Retirement-Related Benefits
Employer contributions	$ 94	$ 66	$ 311	$ 355
Pension Plans, including Multi-employer Plans, and Nonpension Postretirement Benefits Plans
Retirement-Related Benefits
Contributions by employer - Noncash	155	101	410	357
U.S.
Retirement-Related Benefits
Employer contributions	65	33	200	227
Non-U.S.
Retirement-Related Benefits
Employer contributions	$ 29	$ 34	$ 111	$ 128

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent event	Jul. 28, 2020$ / shares
Subsequent Events
Dividend declared, date	Jul. 28, 2020
Dividend declared (in dollars per share)	$ 1.63
Dividend payable, date	Sep. 10, 2020
Shareholders of record, date	Aug. 10, 2020