Recall the practical differences between fair-value measurement evidence and financial-instrument risk disclosures.
Fair-value note versus liquidity-risk note Use both: one tests valuation confidence, the other tests cash timing. Management says: 'The fair value is audited, so there is no valuation concern.' Audit does not make all inputs equally observable. Your line Which inputs are observable, and how sensitive is the valuation to unobservable assumptions? Treating audit status as the same thing as market observability. It directs the conversation to measurement uncertainty rather than audit comfort. What does a rise in Level 3 fair value exposure suggest? More measurement depends on unobservable inputs or models. That does not mean the valuation is wrong,…
Sign up free — one personalized lesson every day, matched to your role and goals.
Already have an account? Sign in