Question

define Fair value and its hierarchy

Answer 1

FAIR VALUE WOULD BE DEFINED AS THE PRICE THAT WOULD BE RECEIVED TO SELL AN ASSET OR PAID TO TRANSFER A LIABILITY IN A ORDERLY TRANSACTION BETWEEN MARKET PARTICIPANTS AT MEASUREMENT DATE.

THE HIERARCHY FOR FAIR VALUE MEASUREMENT WOULD BE BASED ON THE PROVIDED INPUTS AND IN THE FOLLOWING ORDER:-

1.OBSERVABLE , QUOTED PRICES FOR IDENTICAL ASSETS AND LIABILITIES IN THE ACTIVE MARKETS

2.QUOTED PRICES FOR SIMILAR ASSETS AND LIABILITIES IN ACTIVE MARKETS; QUOTED PRICES FOR IDENTICAL OR SIMILAR ASSETS IN NON ACTIVE MARKET; AND INPUTS FOR OTHER THAN QUOTED PRICES.

3. UNOBSERVABLE INPUTS FOR ASSET OR LIABILITY BASED ON THE BEST AVAILABLE INFORMATION CONSIDERING THE COST BENEFIT FOR COLLECTING THE INFORMATION