In the annual report PepsiCo mentioned that they measure certain asset and liabilities using fair value measurement, according to FASB there are three level hierarchy for the fair value measurement technique explain them? Mention example from the balance sheet for asset and liabilities that were measured at fair value for each level if available.
Expert Answer
Based on difference in certain degree, Financial Accounting Standard no. 157, divided fairvalue measurements into 3 levels.
3 level fair value hierarchy:-
The following are the bifurcations of 3 level fair value hierarachy.
Level 1 inputs : – Quoted and observable price of assets or liabilities,
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