Fair Value Measurement and Disclosure

This chapter covers fair value as a measurement concept used across multiple FAR topics. The goal is to understand how fair value is defined, how it is estimated, and how the hierarchy affects both confidence and disclosure.

In This Chapter

• Fair Value Definition and Valuation Approaches introduces the main valuation models.
• Fair Value Hierarchy Levels 1, 2, and 3 explains source quality and observability.
• Fair Value Measurement Disclosure Requirements covers the note information surrounding fair-value measurements.

How to Use This Chapter

• Read this chapter when fair value keeps appearing across different account topics.
• Focus on what drives hierarchy level and valuation approach choice.
• Return here whenever a FAR miss involves Level 1, 2, or 3 classification or disclosure.

In this section

• Fair Value Definition and Valuation Approaches
  FAR coverage of exit price, market participant assumptions, and market, cost, and income approaches under ASC 820.
• Fair Value Hierarchy Levels 1, 2, and 3
  FAR distinctions between Level 1, Level 2, and Level 3 inputs and their disclosure consequences.
• Fair Value Measurement Disclosure Requirements
  FAR coverage of recurring and nonrecurring fair value disclosures, hierarchy transfers, and significant unobservable inputs.