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CHAPTER 8.5.3
FAIR VALUE MEASUREMENT DISCLOSURE
(FASB ASC 820-10-50)
INTERPRETATIONS AND EXAMPLES
03. Financial Assets – Receivables, Loans, and Securities
Interpretations of Topic 820, “Fair Value Measurements and Disclosures” From Accounting
Research Manager.
E-8. QUESTION:
What are examples of the assets and liabilities that are likely to be in Level 2 and 3 categories?
RESPONSE:
Examples of the assets and liabilities that are likely to be in Level 2 and 3 categories include:
 Earn-out agreements;
 Customer lists;
 In-use assets;
 Goodwill;
 Patents and licenses;
 Depreciable assets;
 Amortizable intangible assets;
 Debt obligations and loans outstanding;
 Derivatives;
 Financial instruments requiring risk adjustments; and
 Financial instruments collateralized with assets with unobservable and (or) no active; and
market to value the collateral.
Marketing-related intangible assets include:
 Trademarks, trade names, service marks, collective marks, and certification marks;
 Internet domain names;
 Trade dress (unique color, shape, or package design);
 Newspaper mastheads; and
 Non-competition agreements.
8.05.3-1
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Customer-related intangible assets include:
 Customer lists;
 Order of production backlog;
 Customer contracts and the related customer relationships; and
 Non-contractual customer relationship.
Contract-based intangible assets include:
 Licensing, royalty, and standstill agreements;
 Advertising, construction, management, service, or supply contracts;
 Lease agreements;
 Construction permits;
 Franchise agreements;
 Operating and broadcasting rights;
 Use rights such as drilling, water, air, mineral, timber-cutting, and route authorities;
 Servicing contracts (e.g., mortgage servicing contracts); and
 Employment contracts that are beneficial contracts from the perspective of the employer
because the pricing of those contracts is below their current market value.
Technology-based intangible assets include:
 Patented technology;
 Computer software and mask works;
 Unpatented technology;
 Database; and
 Trade secrets such as secret formulas, processes or recipes.
Artistic-related intangible assets include:
 Plays, operas, and ballets;
 Books, magazines, newspapers, and other literary work;
 Musical works (e.g., compositions, song lyrics, and advertising jingles);
 Pictures and photographs; and
 Video and audiovisual material, including films, music videos, and television programs.
8.05.3-2
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COMMON CLASSIFICATIONS IN THE FAIR VALUE HIERARCHY
LEVEL
1
LEVEL
2
Money market funds or certificates of deposit
X
X
Derivatives
X
X
ASSET OR LIABILITY – FAIR VALUE
Loans
LEVEL
3
X
X
Corporate bonds
X
X
X
Debt securities available for sale, including collateralized debt
obligations and other asset-based securities
X
X
X
Reverse purchase agreements
X
U.S. Treasury securities
X
X
Sovereign debt
X
X
Equity investments
X
X
X
Private equity investments
X
Nonperforming loans
X
Residual interest generated from sale of mortgage-backed
securities or receivables
X
Mortgage or other loan servicing rights
X
Nonfinancial assets
X
8.05.3-3
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REVISION CONTROL
Document Title:
CHAPTER 8.5.3 – FAIR VALUE MEASUREMENT DISCLOSURE
REVISION AND APPROVAL HISTORY
Section(s)
Revised
General
8.05.3-4
Summary of Revisions
Previously in Chapter 8.8 Attachment F
GAAP Manual | Fair Value Measurement Disclosure | June 30, 2015
Revision Date
April 2015