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Investment and Liability Valuation (Valuation Approaches (Income Approach,…
Investment and Liability Valuation
Fair Value
Price to sell an investment
Price paid to transfer a liability
Valuation Approaches
Market Approach
Price of similar transactions
Cost Approach
Price to replace similar asset
Income Approach
Coverts future cash flows to current amounts
Example: Present Value Technique
Fair Value Hierarchy
Level 1 (Same)
Quoted Prices for Same Asset & Liabilities
Level 2 (Similar)
Quoted Price of similar asset and liabilities
Level 3 (Data)
Best Data available
Acquisition Value
Price paid if purchased
Donated items are not considered Acquisition Value
Donated Assets
Donated Art
Investment & Liability Disclosures
Organized by Asset and Liability Type or Class
Fair Value Measurement
Valuation Techniques and if changes
Level of FV Hierarchy used