Fair Value Hierarchy (Level 1, Level 2, Level 3)

This video discusses the 3-level fair value hierarchy. Assets or liabilities measured as fair value are classified into one of three levels based on the nature of the inputs that were used to determine the fair value. Level 1 fair values are based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets (e.g., a share of common stock in a large publicly-traded company). Level 2 fair values are based on observable inputs that reflect quoted prices for similar assets or liabilities, or assets or liabilities that are traded in less active markets (e.g., a municipal bond). Level 2 fair values are not based on observable inputs, but are instead calculated using managerial inputs and assumptions.-
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[@kendallm9062]

Why did I spend 65k/yr in undergrad when this youtube guy teaches me more accounting than 99% of professors?

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Id say most students get into school with out realizing what exactly they are trying to learn, sorry to hear this my advise is to check out Dave Ramsey KZbin great guy on learning how to pay off debt and manage assets

[@MyFinancialFocus]

Interesting. I like studying these concepts and then finding applicable examples when I read annual reports for companies. Thanks for the information!

[@zkrtrt]

Very concise definition of the Levels in Fair Value: Level 1 - Use your eyes. Level 2 - Use your eyes. Adjust for the little things that you can't really see, but have darn good evidence that they should be as you account for them. Level 3 - Blow it out your ass.

[@Notoriouslyswift]

Amazing, thank you for a concise answer and the provided examples! Brilliant.

[@Edspira]

Happy to help!

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[@elenh.1524]

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[@briankaluae9250]

Thank you for the video. what are the complexity involved in the application of fair value accounting from a financial accountant’s perspective?

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[@GoogleUser-fh8ek]

I am having a very difficult time with NAV expedient! Could you do a video on that 🙏

[@thres34]

amazing, is there vide on hedging financial instrument

[@sanyashabbag7628]

I have a question, in the exam question if we're given fair value of equipment as well as original cost of the equipment, which value of the equipment should I put in the statement of financial position (Balance Sheet)????

[@chakoi93]

Sanya Shabbag if there is revaluation, put the fair value and recognise the surplus or deficit in revaluation, if no revaluation put cost price

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