Valuation Techniques- General

Question 1

When would level 2 inputs be used?

Answer 1

• Stock restricted from trading, but similar to traded share
• Securities traded in brokered markets, rather than public (use public market as a base)
• Residential and commercial property with comparable sales
• Private debt securities for which there is publicly trade debt with comparable risk and terms

Question 2

When would you use a level 3 input for fair value?

Answer 2

• Asset retirement obligation
• Financial asset servicing rights
• Capital project determination
• Closely held businesses
• And others